Report - Mobile Phone Banking For Low-Income Customers
More than 800 million mobile phones were sold in developing countries in the past three years (GSM Association 2006) - in South Africa and Botswana for instance, one-third of people who do not have a bank account own a mobile phone or have access to one.
This report presents the first public findings on how low-income people view and use m-banking, using results of a survey of 515 low-income individuals in South Africa. Three hundred of those surveyed do not use m-banking, while 215 are customers of WIZZIT, a startup mobile banking provider.
Targeting the 16 million South Africans who lack or have difficulty accessing formal banking services, Wizzit, bills itself as a “virtual bank” with no branches of its own. Customers can use their mobile phone to make person-to-person payments, transfer money, purchase prepaid electricity, and buy airtime for a prepaid mobile phone subscription. WIZZIT also gives customers a Maestro branded debit card with which they can make purchases and get cash back at retail outlets and withdraw money at any South African ATM.
Findings drawn from the survey show that m-banking services are valued by poor people in South Africa and, for the WIZZIT users surveyed, is more affordable than traditional banking. Other findings include:
- Early adopters of WIZZIT have low incomes, but are wealthier and more technologically and financially sophisticated than most poor people in the country.
- Low-income people use WIZZIT’s m-banking services and give it high ratings for convenience, cost, and security - “cheaper” (70%), “safe” (69%), “convenient” (68%), and “fast” (68%). Nine out of 10 users surveyed say the m-banking service is “not expensive” or is “inexpensive” for the benefits it gives them.
- 97% of WIZZIT users surveyed said that they are “prepared to use technology,” and less than one-third of nonusers surveyed felt that “cell phone banking is (or would be) difficult or confusing to use.”
- M-banking providers must build greater awareness of their services and must find the right balance between human interaction and technology to appeal to more low-income customers.
The report has implications for what the low-income look for if deciding to adopt such a technology, and the audience to target as the early adopters.
Related reads:
Report - Mobile Phones For Social Activism
Filed under: Mobile, eGovernance