M-PESA

On the first day of MobileActive ’08 in Johannesburg, I attended "M-Banking and M-Payments for Social Impact", with Jonathan Donner, Tonny Omwansa, Jesse Moore, Brian Richardson, and Alex Comninos presenting to a packed room. The session gave an overview of m-banking (mobile banking) and m-payments (mobile payments), including specific mobile banking solutions such as M-PESA and Wizzit.

Brian Richardson, the CEO of Wizzit, began by stressing that mobile banking is becoming more and more common in African countries. In South Africa, more than 11 million people live with cash only. 600 million in Africa don’t have access to basic financial services because of affordability, accessibility, and availability. Without access to basic financial services, it’s hard to be an economic citizen.

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Mobile banking has been touted as such a wild success story for one simple reason: mobile phones have penetrated the market in rural areas of developing countries in the last five years more successfully than traditional banks have been able to over the past 100 years. You can travel to any remote village just about anywhere in Sub-Saharan Africa and it is rare that you will find a bank; far rarer that you will find an ATM. (I remember waiting three and a half hours to use an ATM once in Namibia.) But you are guaranteed to hear ringtones.

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