There’s no doubt that one of the key drivers of consumer behavior is convenience. Too much of people’s lives are wasted in unnecessary queues waiting to pay for their goods and services. A few minutes here and a few minutes there might not seem like a lot but in the long run they add up to months of people’s time. Everyone would prefer to spend those months doing something more productive, it’s time you simply can’t get back.
Mobile financial services are a core offering designed to facilitate that additional convenience for people. In the developing world they also offer a means for those traditionally disenfranchised from banks (because of their low earnings)- a means of saving and paying without the need for full banking services.
Mobile Financial Services – The Latest Developments
In Africa, where banks have struggled to develop cost-effective models for engaging with the rural poor, mobile financial services
are being trialed to deliver a system which reduces the need for cash handling and branch support across wide (but scarcely-populated) areas.
It is not that people don’t want to use a bank account but the costs of high-levels of transactions of relatively little worth are too prohibitive for retail banking to work. These costs cannot be passed on to the consumer as they would exceed the value of banking and they cannot be borne by governments which are often revenue-poor in their own right.
By incorporating smart card services in mobile phones – people can “top up” their account at corner stores and markets where the transaction costs are minimal. In addition, people can transfer money easily and quickly between each other to pay for services. The funds are securely held so that losing a phone does not mean losing the balance and thus the rural poor are able to trust the service with their life savings.
Mobile financial services therefore play an important part in developing the local economy. When cash is deposited in banks it can be used to invest in SEO-strategies" class="articleLink">local businesses. This is something that simply was not possible in prior times.