Quite an attention grabbing headline from the WSJ, claiming text messages are good for savings.
A new study by a group of economists looking at why people save money found that simply sending out cellphone reminders increased savings balances by 6%.
The study challenges the idea that people simply don't have enough self-control to save. Instead, the problem may be they just aren't paying attention, said Dartmouth University economics professor Jonathan Zinman, one of the study's four authors. "Savings isn't at the top of their mind," said Zinman. "Basically all we did was remind them."
... In three cases conducted in the Philippines, Peru and Bolivia, the economists teamed up with local banks to send reminders to people randomly selected from those who had recently opened a savings account.
The banks sent several different types of messages, including letters in Peru and text messages in Bolivia and the Philippines. Some used negative language to stress the consequences of not saving money.
"If you don't frequently deposit into the Gihandom Savings account, your dream will not come true," warned one message in the Philippines.
While positive or negative language did not have a significant effect on the savings rate, mentioning a customer's specific goal did. When reminders mentioned incentives offered by the bank for consistent deposits, bank savings increased by almost 16%.
Carol Realini, CEO of Calif.-based Obopay, recently spoke with Investors Business Daily (IBD) about mobile banking and how she got the idea for her four-year-old company while in Kenya in 2002.
I walked into a prepaid cell phone store in Kinshasa, and it looked exactly like a bank. People were standing in line with bags of money. The currency had been devalued, so it took basically a shopping bag of money to buy your prepaid minutes. I said, "This is interesting. What if we generalized the value that was being loaded on the phone?" If we did that, we could have a banking system, and people could have mobile bank accounts.
IBD: So, you were in Kenya ... ?
Realini:... It turns out that the mobile phone is inherently more secure than traditional banking products, like (debit) cards. Here's the reason: You know within six minutes if you've lost your mobile phone. It takes you (an average of about) 18 hours to know that you've lost your debit card.
IBD: What's different about mobile banking in emerging markets vs. developed nations?
One of the big differences is the application that's going to drive the initial adoption, because it's got to start somewhere. In the Philippines, it was prepaid "top off" — a better way to prepay to top off your phone. In Kenya, it was domestic remittances (a family member working in a remote location sending money to family members at home) because there's a lot of urban migration going on.
Telecoms operator Safaricom has integrated its M-Pesa money transfer service and data platform to enable users book and pay for their domestic air, road and rail travel through their data-enabled mobile phones. Kenya's Daily Nation reports.
The company has signed partnerships with local airlines — East African, Air Kenya and Aircraft Leasing Services (ALS), the Rift Valley Railways and bus companies such as Akamba, Crown bus and Busways to offer this service.
With IPX, when customers encounter a paywall, they enter their mobile phone number on the web page and are sent an SMS text message with a four-digit PIN code. The PIN fee is taken from users' mobile carrier bill and, when entered back on the web page, gives them either one-off access to individual articles or longer-term access as part of a subscription deal.
There's no pre-registration of banking details or anything, the only information you need to give is your mobile number.
Swiss daily Le Temps used a similar system for years. It was just great, fast and efficient.
Australia's big banks have ruled out sending SMS messages to bank customers every time cash is withdrawn from their accounts at ATMs, despite a warning that card skimming is rife here. The Sydney Morning Herald reports.
In Romania, where ATM skimming gangs operate, some banks had introduced tighter security measures including SMS alerts sent directly to customers every time an ATM withdrawal was made.
The text messages allowed customers to know instantly if their bank cards were being used by a fraudster.
Bank of the Philippine Islands (BPI) and Globe Telecom are set to launch a mobile microfinance institution, PSBI, after clearing a regulatory hurdle, reports Finextra.
PSBI will be transformed into a bank dedicated to providing wholesale loans to microfinance institutions in the country and will have initial capital of 500 million pesos ($10.8 million).
It will rely heavily on mobile technology to deliver and collect loans in rural areas.
Mobile phones have transformed lives in the poor world. Mobile money could have just as big an impact. A summary of mobile payment options by the Economist.
Across the developing world, corner shops are where people buy vouchers to top up their calling credit. Mobile-money services allow these small retailers to act rather like bank branches. They can take your cash, and (by sending a special kind of text message) credit it to your mobile-money account. You can then transfer money (again, via text message) to other registered users, who can withdraw it by visiting their own local corner shops. You can even send money to people who are not registered users; they receive a text message with a code that can be redeemed for cash.
By far the most successful example of mobile money is M-PESA, launched in 2007 by Safaricom of Kenya. It now has nearly 7m users—not bad for a country of 38m people, 18.3m of whom have mobile phones.
Credit and debit card fraud can be reduced through the use of SMS alerts, according to mobile messaging service provider Clickatell.
Mobile Marketer's Chris Harnick interviewed Chuck Drake, executive vice president of marketing at Clickatell, Redwood City, CA.
We’re finding credit and debit card fraud can be greatly reduced through the use of simple SMS alerts sent to the cardholders’ mobile phone to engage the consumer more directly in the process of early fraud detection and prevention. Banks and other card issuers must implement SMS alerts for every transaction, allowing consumers to take part in the fight against fraud.
Millions of Africans are using mobile phones to pay bills, move cash and buy basic everyday items. So why has a form of banking that has proved a dead duck in the West been such a hit across the continent?. The BBC reports.
The USAA bank will soon let you deposit a check with your iPhone, reports Wired.
Many banks have iPhone apps that allow online banking, but USAA, from its single branch in San Antonio, will be the first to dispatch with the decidedly old-school check.
Using the free USAA application, customers photograph the front and back of the check with the iPhone’s camera. Hit send and the check is whisked off into the clearing system. The paper check itself never needs to go to the bank, and you can just tear it up and toss it away (or, for the more paranoid, file it in a safe place). The service will be appear in an update to the already available iPhone app sometime this week. The application will also steer you to your nearest ATM, show you where the nearest car rental joint is and, weirdly, “record accident details to help you file a claim.”
Visa Europe is trialling an SMS transaction alert service for cardholders in an attempt to step up card security. Computing.co.uk reports.
Using the service, Visa credit card holders can instantly receive on their mobile the time, location and amount of each transaction.
Cardholders can choose to have the updates delivered via text message, mobile email or to applications running on smartphones such as the iPhone or Android-based devices.
The alerts are being tested with Visa staff in the UK and its network of member banks, and the service will be made available to consumers if the trial is successful – in which case, future developments could include instant conversion into the user’s home currency while abroad.
GSMA - which represents the interests of the worldwide mobile communications industry - estimates that by 2012 about 364 million handset owners without bank accounts will sign up for services that allow money transfers and payment of bills. Mobile money’s reach will increase as it becomes available in more countries and customers get more familiar with it, the group predicts. Bloomberg reports.
... “In emerging markets not many people have access to financial products,” said Howard Wilcox, a Basingstoke, England- based analyst at Juniper Research Ltd. “Typically many more people have a mobile phone than a bank account and therefore the mobile phone has in many cases become a much more trusted brand than the bank.”
The Nairobi Stock Exchange continued its technology advance with the introduction of buy and sell orders via mobile phones. Last week, Standard Investment Bank introduced a text messaging service for its clients to place orders.
Standard Investment Bank (SIB) assures clients that the SMS service is secure and they provide confirmation within the hour.
People who bank with Lloyds TSB will be able to find out their balance by sending a text message, the company has announced, reports The Telegraph.
The bank's "balance on demand" service, which the bank says is Britain's first, goes live today. To use it, customers text BAL and the last four digits of their current account to a special short phone number.
They then receive a text with their latest balance, as well as details of their last six transactions. The texts can be requested "whenever and wherever they are needed", Lloyds said, and are sent "instantly".
The mobile banking pack also allows customers to transfer money between accounts and set up text alerts to tell them, for example, if their balance has fallen below a certain level. However, these services need to be set up through online banking or a special application that is downloaded to the phone.
According to Cellular News, a financial services technology group is developing standards for making secure mobile payment transactions.
The project is an effort of the Financial Services Technology Consortium (FSTC), an industry group comprising banks, technology vendors, researchers and government organizations, which develops technology standards for the financial services sector.
The goal of the project is to develop standards and processes so that banking customers are able to securely pay a merchant or another bank customer using their phone, no matter what mobile device or carrier they use.
The market of mobile financial services to poor people in emerging markets will surge from nothing to $5 billion in 2012, U.S.-based microfinance policy and research center CGAP said on Monday. Reuters reports.
The market began in early 2007 with a launch of Safaricom's M-PESA in Kenya, which has attracted 6.5 million customers, or one in six Kenyans.
Operators in several emerging countries have followed, and by end-2009 CGAP expects more than 120 mobile money implementations in developing markets.
The new estimates are part of GCAP's joint study with industry group GSMA on estimating the size of mobile financial markets. The study is due to be published next week at the Mobile Money Summit in Barcelona.
Pickens said on top of the $5 billion, telecoms operators could save up to $2 billion from lower customer turnover, and the takeup of financial services would lift by $1.10 their average monthly revenue per user (ARPU).
Would you be comfortable using your phone to purchase big-ticket items, such as round-trip tickets to Tokyo? Or front row seats at a Beyoncé concert? Billing Revolution, a mobile payment start-up based in Seattle, thinks so. Bits Blog reports.
Generally, purchases made on mobile phones are charged to cellphone bills, with mobile carriers taking a share of the revenue. Billing Revolution processes mobile credit card payments — not unlike the one-click buying system used by Amazon — for companies such as GameLoft and ESPN.
Japan's top mobile telephone operator NTT DoCoMo said Wednesday it aimed to launch a new service enabling cash transfers simply by entering the recipient's cellphone number. Reuters reports.
After applying online, users would be able to send money to another DoCoMo subscriber's bank account even if they do not know their bank details. The amount will be charged to the sender's phone bill, said company spokesman Taishi Hoshino. "We hope to begin the service as early as this summer," he said.
Transfers are expected to be limited to about 30,000 yen (316 dollars) a month for each subscriber, he said. Further details such as DoCoMo's banking partner and the service charge will be decided soon.
MasterCard has announced that its Money Send service will go live later this month in the U.S., allowing customers to send and receive funds by text messages, the mobile browser, mobile apps, or over the internet from a PC. MocoNews reports.
The service is already available in 17 other countries, including Singapore, Malaysia, Indonesia, Thailand, India, and the Philippines.
Last week, Saul Hansell of NY Times Bits blog described how you can make your cellphone work like a credit card by applying a sticker to the back. The sticker, equipped with a radio frequency identification, or R.F.I.D., tag lets you wave the phone over a terminal to make a purchase.
This week Hansell explains how Visa's cellphone payment system is more than sticker-thin. The service is currently available only in Malaysia, but it will be expanded to other countries in coming years.
Like some phone payment schemes already used in Japan, the Visa service uses a chip on the phone to communicate with a payment terminal. But the latest version is based on a global standard for phones and telephones called near field communications.
There are signs the mobile payments market is really taking off at last with Nokia announcing a substantial investment in service provider Obopay today, reports the FT.
The amount, understood to be in the region of $70m, is being put in by Nokia itself rather than its venture arm and gives it a minority stake in the Silicon Valley company.
Obopay operates in the US and India. It allows those signing up for its service to fund their account with cash or by linking up their credit card or current account. They can then send money to any text-message enabled cell phone. The receiver can either sign up for an Obopay account or have the money transferred directly to their bank account.
Obopay charges 25 cents to send any amount up to $1,000 and nothing to receive it.emily | 3:59 PM | permalink
South African mobile phone operator MTN on Monday said it was launching a banking service on mobile phones in 21 African and Middle East countries where access to traditional banks is poor. Yahoo Tech reports.
MTN is planning to offer a fully-fledged bank account on mobile phones called MTN MobileMoney which will allow users to pay for purchases or check balances. A credit card will be optional.
MTN calls the service "a convenient, secure and affordable way for MTN subscribers to send money, buy airtime and pay bills using their cellphone".
The service will be extended to the other 20 countries where MTN operates including Uganda, Nigeria, Cameroon and Ivory Coast which have a combined 90 million mobile phone users.
The latest tool to fight identity theft may already be in your pocket - it's your mobile phone. Using a new solution from Clickatell a mobile messaging service provider, consumers can be alerted to suspicious bank transactions via text message.
The service called Clickatell SMS Receipts notifies banking customers of account activity via SMS alerts. With this real-time information, consumers are instantly able to verify legitimate use of their account or detect fraud.
Deutsche Bank's Global Transaction Banking (GTB) division has announced that it is introducing mobile phone payments services to its clients in 80 countries across Europe, Middle East and Asia. Cellular News reports.
This new mobile payment service will allow the Bank's GTB clients to offer millions of consumers an instant and secure payments and money transfer service from any mobile device with any mobile network. It is the first time a major commercial bank has offered a cross-border mobile payments service to its banking and corporate customers.
Mobile banking will take off over the next 5 years, led by behavioural challenges in the developing world as people who currently have no access to banking or electronic payment services take up mobile banking. mocoNews reports.
Informa Telecoms & Media predicts that in 2013 almost 300 billion transactions worth more than $860 billion will be conducted using a mobile phone, which would represent a 12-fold increase in gross global transaction values in just five years.
-- Informa predicts that by 2013, over 445 million mobile subscribers will be regularly using their mobile phone to purchase physical goods and services remotely.
-- By 2013 there will be 977 million users of mobile banking services worldwide, compared to around 67 million at the end of 2008 forecasts Informa.
-- Informa predicts that by 2013 almost 424 million consumers will be sending over $157 billion of personal funds via mobile domestically whilst a further 73 million will be sending $48 billion of funds via mobile internationally.
According to IntoMobile, Visa is being sued by a small US business for infringing a patent which covers the use of SMS messages used to alert spenders of transactions.
Charge Notification Services Corporation (CNSC) out of Miami, Florida has taken exception to the service that Visa and some of their partners have recently been offering.
Their patent covers charge card transaction authorization and/or notification in real-time via SMS to a mobile device.
Bill Gates' charitable foundation has pledged $12.5m (£8.6m) to help the world's poor access banking services. The BBC reports.
Working in conjunction with the mobile phone industry, the foundation aims to help provide a basic service that local banks are unable or unwilling to give.
It is thought that more than a billion people worldwide do not have a bank account but do have a mobile phone.
The foundation says that extending banking services to the world's poor is vital for economic progress.
... Research by consultants McKinsey estimates that the mobile money market for people without a bank account could grow to $5bn over the next three years.
Microsoft founder Bill Gates has agreed to help fund a massive rollout of projects enabling poor mobile phone users to transfer money using their handsets, an industry body announced Tuesday. From Yahoo Tech.
The GSM Association, which represents 750 mobile phone networks in the world, said a grant of 12.5 million dollars (9.8 million euros) from the Bill and Melinda Gates Foundation would help fund 20 initiatives in Asia, Africa and South America.
Money transfer via mobile phone is seen as a potential area of growth for network operators in developing countries, where millions are without access to the banking system.
"There's 1.7 billion people in the emerging markets who don't have a bank account but do have a mobile phone, so they could use their mobile phone to conduct financial transactions," explained Michael O'Hara, marketing director or the GSMA.
"The target is to reach 20 million additionnal unbanked people with the service by 2012," he added.
About 12 mobile phone banking programmes have been launched worldwide in the last few years, with about 10 million users benefiting so far.
The Gates Foundation said the grant was part of its programme to extend financial services to the poor who are often without access to a simple savings account.
"The foundation believes that setting aside small sums in a safe place allows people to guard against risks and build financial security," said spokeswoman Susan Byrnes in a statement received by AFP in Washington.
The GSMA estimates that the money transfer market on mobile phones could represent 5.0 billion dollars by 2012.
The mobile banking business is growing in countries like Kenya, Turkey and Japan, while the combining of wallets with cell phones has been held back elsewhere by disagreements over sharing revenues. Reuters reports.
In Kenya and Turkey, millions of people use phones to send money or access their bank accounts; in Japan, more than 50 million people, or about half of all cell phone users, already carry phones capable of serving as wallets.
The technology for paying with cell phones by flashing them near reading equipment in stores or on public transport is ready, and the initial feedback is good, said Mary Carol, head of mobile in Visa Europe (V.N).
"Trials show that consumers overwhelmingly like it," Carol said. "The biggest problem has been the business model."
It will also take at least until 2010 before phones equipped with such technology are widely available, and the financial industry and telecom operators need to agree on some kind of revenue and role split, industry executives say.emily | 10:20 AM | permalink
Although providers of SMS loans charge up to 1,000 percent a year in interest, almost one in every ten Estonians has applied for such a loan, reports Baltic Business News.
It only two years since that the first companies started to offer SMS loans in Estonia this has grown into a business worth at least a billion kroons.
It is believed that the market share of SMS Laen is more than 50 percent in Estonia. There are about ten companies offering SMS loans in Estonia today.
Since about 10 percent of the people who have taken an SMS loan have problems in repaying the debt, this means that also debt collection agencies have plenty of business.
“The number of small borrowers in trouble is increasing,” confirms Jaanus Laidvee from debt collection agency Julianus Inkasso. In average, customers in trouble owe between 20,000 and 25,000 kroons ($1,600 and $2,100).
The study challenges the idea that people simply don't have enough self-control to save. Instead, the problem may be they just aren't paying attention, said 
Carol Realini, CEO of Calif.-based 
Telecoms operator Safaricom has integrated its 
Mobile phones have transformed lives in the poor world. Mobile money could have just as big an impact. A summary of mobile payment options by the 
The 
The market of mobile financial services to poor people in emerging markets will surge from nothing to $5 billion in 2012, U.S.-based microfinance policy and research center 
MasterCard has 
Last week, 
Mobile banking will take off over the next 5 years, led by behavioural challenges in the developing world as people who currently have no access to banking or electronic payment services take up mobile banking. 
According to 
Bill Gates' charitable foundation has pledged $12.5m (£8.6m) to help the world's poor access banking services. The 
The mobile banking business is growing in countries like Kenya, Turkey and Japan, while the combining of wallets with cell phones has been held back elsewhere by disagreements over sharing revenues. 
Although providers of SMS loans charge up to 1,000 percent a year in interest, almost one in every ten Estonians has applied for such a loan, reports 
