Mobile Financial Services: Extending the Reach of Financial Services through Mobile Payment Systems

This edition of FDC Nai Sema investigates current literature on mobile financial services, and evaluates their effectiveness in providing financial services to unbanked populations. Accessibility of mobile phones can aid poverty reduction for the unbanked. Mobile phones provide wide networks, with the advantage of physical proximity, and play a significant role in remittance transfers. Challenges that the mobile financial services industry faces include customer illiteracy, low awareness and lack of regulatory framework. The report explores risks that bank regulators and supervisors seek to mitigate when dealing with mobile financial systems. It:

• Highlights overall benefits and challenges faced by the emergence of mobile financial services;
• Examines several successful cases of mobile financial services in developing countries, such as the Philippines, South Africa and Kenya;
• Looks at three recently launched mobile financial services, namely, WING in Cambodia, Absa Cellphone Banking in South Africa, and Bualuang iBanking in Thailand;
• Compares mobile financial services with other technologies that expand financial services reach such as Personal Digital Assistants, Smart Cards and ATMs.