WAITING ON THE PHONE
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