We in the US think of iphone apps when we think of mobile innovation. It is an important trend as it opens up mobile from the tigth grips of the carriers. However innovation of gargantual proportions is happening outside the US in places like Asia and Africa.
Louise Greenwood of BBC reports on how mobile banking is revolutionizing africa.
Millions of Africans are using mobile phones to pay bills, move cash and buy basic everyday items. So why has a form of banking that has proved a dead duck in the West been such a hit across the continent?
It has been estimated that there are a billion people around the world who lack a bank account but own a mobile.
Africa has the fastest-growing mobile phone market in the world and most of the operators are local firms.
In countries like South Africa, for example, mobile phones outnumber fixed lines by eight to one.
In Kenya there were just 15,000 handsets in use a decade ago. Now that number tops 15 million.
Setting up a bank account on your phone is straightforward. All you do is register with an approved agent, provide your phone, along with an ID card, and then deposit some cash onto your account.
You can use it to pay for everything from beer to cattle - one Masai farmer told the BBC that when he sells cows in Nairobi, he puts the money on his phone to ensure that robbers can’t get his cash.
A Kenyan woman said she uses the technology to transfer money from her phone to that of her parents while a Nairobi businessman told us it was handy for settling customer accounts.
Large volumes, small transactions
In Tanzania just 5% of the population have bank accounts. In Ethiopia there is one bank for every 100,000 people.
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Even Africans with bank accounts often face high charges for moving their cash around. It is this gap in the market that mobile phone banking is targeting.
While the amounts of cash being transferred are often tiny, the sheer volume of business compensates for that, as Pauline Vaughan, head of Kenya’s biggest mobile phone banking service M-Pesa, explains.
“We have over seven million customers who have registered for M-Pesa…. Our average transaction is actually less than $40 [£24] - this is the kind of customer we are addressing,” she says.
“But in total we are moving in excess of $8.5m per day.”
In many ways these places are more advanced than US. There is no cost for incoming calls and SMS in India. This makes a huge difference as it enables sms as a major platform for both consumers and businesses. In US you do not want to receive SMS messages unless you have a texting plan. This stifles mobile innovation. Way to go africa!