Mobile money is the key to inclusive banking

The use of mobile phones to pay money and manage bank accounts is becoming increasingly ubiquitous, thanks to its unmatched convenience.

The worldwide mobile money user base is expected to tip the one billion mark in five years from between 45 - 55 million currently, according to research by McKinsey & Co and Berg Insight.

Within the next three year remote payments via mobile phone is expected to tip a gross transaction value of $379 billion, and money transfers, both domestic and international, will become a $1trillion market.

According to both McKinsey and Gemalto, for operators this could generate an extra $5 billion per year in direct revenues from service fees such as transaction and cash out, and an additional $3 billion from indirect revenue from reduced churn and higher ARPUs.

A recent Economist study indicates that in emerging economies, traditional retail channel dependency may skip the hitherto traditional teller, branch, and internet and telephone channels, direct to mobile – not just to leverage the penetration depth of the mobile, but on account of the favourable economics for service delivery of this channel over all the other channels.

Clearly, the use of the mobiles costs just one-tenths of that of the most efficient channel currently - the internet, and 100 times less than actually going to the bank or using a teller service.