MobileActive.org

Across developing countries, millions of people rely on informal economic activity and local level networks to earn their living. Most of these populations are from bottom of pyramid and they don’t have access to basic financial services/banks as access to them is costly and very limited. However, the outstanding growth of mobile sector worldwide has created a unique opportunity to provide social and financial services over the mobile network. With over 4 billion mobile cellular subscriptions worldwide, mobile network has the ability to immediately offer mobile banking to 61% of the world population. A study states the biggest share of mobile payment users will be in the Asia/Pacific region by 2012 (Gartner, 2008). In the context of being the most promising ICT market and the largest inbound remittance receiver, this region is expected to be the hub of m-banking transactions. 

The paper starts with an overview of existing models of m-banking and then examines the m-banking regulations in some South Asian countries and of the countries where (e.g. the Philippines, Kenya, South Africa) m-baking/payment systems are already in practice or a success. The concerns of financial regulators and policy measures taken so far are discussed.

The key questions this paper aims to answer:

⇒ What are the practiced models of m-banking/payment systems? 

⇒ What concerns are generally raised by financial regulators?  

⇒ Which m-banking/payment models have drafted or enacted in South Asia?  

⇒ Which m-banking/payment models have are enacted in the countries where it is a success?

⇒ What constitutes a proportionate regulatory approach?  

The answers to the above questions helps to identify a way forward which can expedite adoption of m-banking/ payments service in South Asia successfully and quickly.  

The FCC conducted a survey of 5,005 Americans in October and November 2009 in an effort to understand the state of broadband adoption and use, as well as barriers facing those who do not have broadband at home. Pages 21-23 contain data about mobile usage.

The report indicates that 86 percent of American adults own a cell phone, and 30% use their devices to access the mobile web. In contrast, 66% have sent or received text messages. The numbers are higher for minorities; 36% of African-American and Hispanic users use their devices to access the mobile web. There is also a generational gap; 48% of those 19-29 access the mobile web, compared to only 5% of those over 65.

Mobile phone ownership in low and middle-income countries has skyrocketed in the past several years. But a woman is still 21% less likely to own a mobile phone than a man. This figure increases to 23% if she lives in Africa, 24% if she lives in the Middle East, and 37% if she lives in South Asia. Closing this gender gap would bring the benefits of mobile phones to an additional 300 million women. By extending the benefits of mobile phone ownership to more women, a host of social and economic goals can be advanced.

Mobile phone ownership provides distinct benefits to women, including improved access to educational, health, business and employment opportunities. Women surveyed across low and middle-income countries on three continents believe that a mobile phone helps them lead a more secure, connected and productive life. 

Due to the increasing penetration of mobile phones even in poor communities, mobile-phone-enabled banking (m-banking) services are being increasingly targeted at the “unbanked” to bring formal financial services to the poor. Research in understanding actual usage and adoption by this target population, though, is sparse. There appear to be a number of issues which prevent low-income, low-literate populations from meaningfully adopting and using existing m-banking services.

This paper examines variations across countries in adoption and usage of existing m-banking services by low-literate, low-income individuals and possible factors responsible for the same. It is observed that variations are along several parameters: household type, services adopted, pace of uptake, frequency of usage, and ease of use. Each of these observations is followed by a set of explanatory factors that mediate adoption and usage.

Due to the increasing penetration of mobile phones even into poor communities, mobile payment schemes could bring formal financial services to the “unbanked”. However, because poverty for the most part also correlates with low levels of formal education, there are questions as to whether electronic access to complex financial services is enough to bridge the gap, and if so, what sort of UI is best.

In this paper, we present two studies that provide preliminary answers to these questions. We first investigated the usability of existing mobile payment services, through an ethnographic study involving 90 subjects in India, Kenya, the Philippines and South Africa. This was followed by a usability study with another 58 subjects in India, in which we compared non-literate and semi-literate subjects on three systems: text-based, spoken dialog (without text), and rich multimedia (also without text). Results confirm that non-text designs are strongly preferred over text-based designs and that while task- completion rates are better for the rich multimedia UI, speed is faster and less assistance is required on the spoken-dialog system.

This document aims to help readers understand the current challenges of deploying development-oriented services on mobile phones, evaluate existing technologies, and identify the most promising directions to lower the barriers of developing, deploying and accessing services on mobile phones and thereby creating an enabling environment for more social-oriented services to appear.

This document is divided into two major parts. The first part presents the major challenges today for both developing and accessing mobile services, potential ways to bridge them with existing tools, technologies and infrastructure, and potential research directions to follow to provide a more comprehensive resolution or solution. The second part focuses on presenting the major technologies and the major options existing today to deploy content and applications on mobile phones. For each of these technologies, the document presents a short analysis of the technology's potential and the requirements in terms of infrastructure, devices, targeted end-users, and costs associated with implementation and delivery.

There was a time when the adoption of mobile phones was expected to be limited to the wealthy and early mobile phone designs included a number of features that supported shared use on the assumption that few people would be able to afford one of their own. 4 billion plus cellular subscribers later and it’s the mobile phone owning residents of Accra or Cairo that are more likely to use multiple devices than the residents of London or Tokyo.

The first billion mobile phones were sold in about twenty years, the second billion took four years, and the third billion were sold in just two. That the mobile phone has had a positive qualitative and quantitative impact on many of the world’s poor is no longer an issue for debate, and the simple fact that many invest in a few months salary to purchasing one suggests that it continues to meet a broad spectrum of base user needs from directly creating revenue generating opportunities to indirectly supporting survival. As a personally carried, connected device the mobile phone is in a prime position to bring mobile money services to the world’s unbanked, and today there is much activity, debate and not a little hype on its potential (Ramussen, 2009).

This paper discusses the factors that will affect whether recently established mobile money services such as M-PESA can also achieve success in other markets, and whether new services and business models will fly or fail? What can we learn from previous research into mobile phone behaviours and practices?

The ‘dual system’ thesis has been used to describe the continuing commitment of urban migrants to the village in various African countries. According to literature, urban workers maintain strong ties with the rural area, even after spending a substantial amount of time in the city. One way in which these ties are maintained is through urban‐to‐rural remittances.

In March of 2007, an m‐banking application called M‐PESA was introduced into the Kenyan market. This application allows for person‐to‐person (P2P) transfers of e-money via mobile phone, and facilitates urban‐to‐rural remittances.  This study will use ethnographic data collected in a Kenyan slum to show that M‐PESA is becoming a tool for the maintenance of urban-rural relations. It will further assert that because it is helping migrants to maintain such relations, it is facilitating survival in the ‘dual system’.

Presentation to the Cellular Operators Association of India with current LIRNE Asia data on ICT use (including mobile) at the bottom of the economic pyramid.  Ongoing work of LIRNE Asia.

This review considers the differences between the adoption rates of M-PESA in Kenya and Tanzania and tries to highlight some of the reasons that the same service launched in seemingly similar countries has yielded such different results. This paper is intended as a discussion document for mobile network operators considering launching a mobile money service.

Safaricom launched M-PESA in Kenya in March 2007 and has since become the most famous and probably the most successful implementation of mobile money service to date. In May 2008, 14 months after the launch, M-PESA in Kenya had 2.7 million users and almost 3,000 agents. Today, over two years since its launch, M-PESA has gained 7 million registered customers and has 10,000 agents spread across the country. This exceeds the reach of any other financial service in Kenya.

Finaccess 2009 showed that M-PESA has become the most popular method of money transfer in Kenya with 40% of all adults using the service. The same Kenyan survey also shows a dramatic increase in national remittances; from 17% in 2006 to 52% in 2009, which may be attributed to the ease of money transfer through ubiquitous M-PESA agents. Many mobile network operators have been eager to repeat M-PESA’s success in Kenya, but the formula for this success is not yet clear. One year after the Kenyan launch, Vodacom launched M-PESA in April 2008 in Tanzania. The user uptake of the service in Tanzania has been much slower compared to its northern neighbour. In June 2009, 14 months after the launch, M-PESA in Tanzania had 280,000 users and 1,000 agents (Rasmussen 2009).