Mobile Phone Based E-Banking
There is growing consensus that e-banking offers a unique opportunity to address mainstream banks’ two major barriers to serving the low-income market: the need for a branch infrastructure and managing high volumes of low value transactions. In addition, e-banking systems hold the promise of being able to extend centralised banking systems deeper into rural communities. Despite this, examples of failed ebanking initiatives provide ample warning that adopting e-banking solutions is not an easy proposition.
In general initiatives do not fail because of technological problems but because they have not adequately addressed the customers’ needs not those of the intermediary agents who are an essential part of the system. This briefing note emphasises the importance of keeping things simple and being prepared to go through an iterative learning process. Providers need to involve users in the development process to ensure the service addresses their needs in a practical manner.
Successful introduction of this technology can be expected if service providers concentrate on areas where cash is inconvenient and the solution can do things that cash cannot. An example of this would be enabling small business people to pay suppliers and repay loans from their business premises.