Mobile Banking on the Increase in Developing Countries

Mobile banking is becoming more and more popular in countries of the Third World. While in developed countries almost all people have bank accounts, only a small part of the population in underdeveloped countries has access to banks. In mobile banking a person who wants to send money does so by sending the amount via text to the receiver’s phone number. The person who receives the money goes to an authorized local shop that and withdraws the cash.
There are many examples for mobile banking in the Third World. Hospitals in Tanzania send money to women so that they can pay for the bus fare to the hospital.  In Afghanistan the government pays its policemen by mobile phone. Coffee plantation owners in East Africa send workers their money via text.
Mobile banking has become popular where there are few banks but where most of the people have a mobile phone. The potential market is especially large in South America where only 35% of the people have bank accounts but 90% have mobile phones.
Many mobile phone companies are taking over banking services in underdeveloped countries. In the last two years almost one million people in six African countries have signed up with European mobile operator Orange. In Kenya and Tanzania, British operator Vodaphone has  20 million customers who send money to other people in the country and abroad.
In Pakistan, Norwegian mobile phone company Telenor has been offering mobile banking since 2008. People can withdraw money at almost 11,000 shops throughout the country. Pakistan itself has only a little over 8,000 banks. Money transfers are limited to $120, with Telenor taking 5% of the amount.
The number of mobile banking customers is expected to rise in Third World countries from currently 60 million to almost a billion in 2015. Over 80% of these costumers live in Latin America, Africa and Asia.
In the developed world mobile banking has not become a serious option because most customers have bank accounts and transfer their money via Internet banking. As more and more Americans and Europeans buy smartphones mobile banking will probably increase.