Finweek English Edition - - Companies & markets - SIZWEKAZI JEKWA

LATE IN 2005 ev­ery ma­jor bank in South Africa was build­ing a com­pre­hen­sive cell­phone bank­ing of­fer­ing. It was hailed as the new fron­tier in bank­ing and ev­ery bank said it was headed for great things.

Stan­dard Bank formed a joint ven­ture with MTN, called MTN Bank­ing. Absa of­fered free mo­bile bank­ing to all its cus­tomers for six months in an ef­fort to gain mar­ket share, as it had done with the In­ter­net. FNB re­launched new tech­nol­ogy and mar­ket­ing for its cell­phone bank­ing of­fer­ing and at­tracted 100 000 sub­scribers in six months.

That came af­ter stud­ies showed that 31% of SA’s un­banked had pre-paid cell­phones and an­other 17% had ac­cess to the cell­phone of a friend or rel­a­tive.

Even though an es­ti­mated 22m South Africans carry cell­phones, the up­take on mo­bile bank­ing hasn’t been good across all seg­ments.

For ex­am­ple, MTN Bank­ing has strug­gled to reach breakeven point, with only 58 000 users on their books last year when they had hoped to reach 400 000 users by mid-2006.

The latest fig­ures from Fin­Mark Trust, an in­de­pen­dent re­search or­gan­i­sa­tion, show that last year the es­ti­mated num­ber of cell­phone bank­ing users in SA was around 450 000 against 250 000 in 2005. That rep­re­sents a rather mod­est 80% in­crease across the whole sec­tor, com­pared to a 150% in­crease in 2004, when the num­ber of users climbed from 100 000 to 250 000.

“We’re still in the pi­o­neer phase of cell­phone bank­ing in SA,” says Jeremy Leach, ex­ec­u­tive di­rec­tor at Fin­Mark Trust. “But early in­di­ca­tions seem to be that many peo­ple still don’t un­der­stand the ben­e­fits of us­ing the fa­cil­ity.”

The sur­vey found that 42% of SA’s pop­u­la­tion had never heard of cell­phone bank­ing while a fur­ther 28% didn’t know what it meant in prac­tice.

Peo­ple still don’t un­der­stand the ben­e­fits of cell­phone bank­ing. Jeremy Leach

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.