How They Work

“Mobile Banking” We cannot imagine how life would have been without the mobile phone! The Mobile phone has gone to unprecedented levels such that, it has become a way of life. Nearly a decade ago, we merely used to hear of people paying their bills by mobile phone (like you do with s Credit or debit card), now, it has become a reality. That said and done, how does this system work? Most probably may have seen the commercial of someone with a broken down vehicle from nowhere; he receives a text message on his mobile phone. The message is from his bank, telling him that he has issues a cheque but has no matching funds on account! With just a few clicks on his phone, he transfers funds from his savings account to the checking account and the problem is solved just like that! Even as he is stuck in the wilderness, he is confident that his financial position remains in order. This scenario, though highly dramatized for effect, illustrates what many believe is the future of banking. It’s mobile banking, or M-Banking, which enables mobile phone users to access basic financial services even when they are miles away from their nearest branch or home computer. In some parts of the world, such as the South America and Africa, mobile banking is already flourishing; but in the United States, the figures were about 10-20 percent of consumers that were using their cell phones to conduct bank transactions. This could be because of more reliable banking and internet services as compared to the Tropical world! Several trends have driven this growth. First, more banks are rolling out mobile banking solutions, paralleling a move by major cellular carriers to upgrade their networks to deliver faster data speeds, e.g. 3G and 4G data portfolios. At the same time, people are investing in more advanced, Web-ready phones and personal digital assistants (PDAs) like the BlackBerry, iPhone, HTC, etc. Basic cell phones are perfectly capable of delivering mobile banking services. And, finally, awareness and consumer confidence are on the rise and this is likely to increase the usage of Mobile Money usage. As of now, many Utility companies, Pay TV, Internet ISP (Hotspots), all use this mode of payment. It is just a matter of time that, we shall be getting our salaries sent the mobile phones rather than Bank Accounts. At the moment, awareness is what is needed in order to convince the mobile users that, the system is viable. In our next articles, we shall look at the various aspects of mobile banking, from the technologies involved to the types of services you can expect to receive. But before we dive into technical details, let’s be clear about what mobile banking is and what it isn’t. (To be Cont’d) eddie@afrowebs.com