M–Pesa And Likes Wiping Out Plastic?
For those wishing they have the convenience of not having to carry cash or cards around all the time, here’s good news. Your quintessential mobile phone has everything that it takes to become your new payment device. A prime example of the popularity of this technology is M-Pesa, the free account offered by Safaricom Kenya that allows subscribers to send large amounts of money in an instant transaction, at low costs. So where would mobile banking work best? In an interesting insight from the popular green website Worldchanging, we learn that the untapped market might well be in the lower segments of the economy. This is because in developed nations, there already exists a well established credit card infrastructure with addresses and credit histories, allowing customers to open bank accounts and receive loans. For the class of people with no permanent address or credit history and no bank accounts, mobile banking and the likes of M-Pesa are proving to be the ideal ways of monetary transactions. Is this a hint then for entrepreneurs looking to rival Visa and Mastercard? Quite likely. Dean Proctor at Finextra suggests that mobile banking should be given a serious thought. With time taken for transaction to clear lasting for just about 10 seconds, using a mobile to bank is as good as swiping a card. Fraud, resulting only if the phone is stolen can be better managed too, with secure authentication. M-Pesa has had a tremendous response since it was rolled out to major cities in Kenya. With a lot of Kenyans living below the poverty line and depending on financial assistance from their relatives in the cities, M-Pesa is proving to be a boon of an innovation. Read more here.