Tuesday, March 09, 2010

Mobile Payments review on Fast Company

Mobile Payments Are Taking Off. But Which One to Use?

BY Chris DannenTue Sep 1, 2009

Mobile payments system Boku just announced that it will work with a bevy of social networks and gaming sites. But competitor Zong, was recently chosen to pilot Facebook's virtual currency, called Credits. Both sites will face considerable opposition from Obopay, a seasoned startup that recently earned the backing of mobile phone giant Nokia for its Nokia Money payment system. Mobile payments are convenient, fast and easy--but which service should you use?

That depends on what you want to do. Mobile payments services work in two ways: some allow you to buy stuff from online retailers using your phone, while others allow you to send money to your friends. A couple of services do both. Here's the rundown.

If you're a worldwide user, it's hard to beat Boku's dead-simple setup and its 56-country availability. When you buy things online with Boku, you simply navigate to a participating site and punch in your cell phone number. You get a confirmation text, to which you reply "Y" to say yes to the charges. The sum then shows up on your cell phone bill. That's great for in-game purchases or retail items, but it doesn't let you send money to your peers.


Zong works similarly. The company got its start doing TV-based voting (think American Idol) in Europe, and then leveraged its carrier relationships to start the payments division. While Zong is only available in 19 countries, the company's been around for almost 10 years, which should be long enough to comfort any nervous adopters. Punch in your mobile number, confirm, and the charge appears on your bill. Again, this is only for paying for things online--not for spotting your friend a few bucks.

Obopay is more sophisticated, because it lets you actually send money to other individuals--not just online businesses. But that also means you need to create an account and charge it up with money, something that's not necessary on Zong or Boku. You can also use Obopay online, without a phone, and since it has partnered with Nokia, it'll have extensive worldwide availability before too long.


Not one to be left out, PayPal also has its own mobile payment system, and an iPhone app to boot. PayPal lets you send money either using a text message or its iPhone app, and in either case it will call you back after you enter your transaction so that you can confirm by entering your pin. Since PayPal is renowned for its aggressive security measures, there's no doubt that it is the most trustworthy of the bunch, but also the most subject to the hassles that come with high security. PayPal's fees are also among the more substantial, depending on how big an amount you're sending.


Amazon's Payments system also has a mobile iteration called Amazon TextPayMe, which allows Amazon members to pay (or request payment) using their Amazon accounts. Just like Zong and Boku, the whole process requires just a few text messages. The same system allows you to search and buy Amazon products with a feature called TextBuyIt, and like Obopay, there's a Web-based equivalent if you don't feel like messing with your phone to send someone money. You can also send someone a gift card using a text message, if you're of the ilk that likes to micromanage your recipient's spending. Overall Amazon's system is likely the best for most purposes: simple, secure and flexible, and with about as much simplicity as can be expected from something so capable. And chances are you have an Amazon account anyway

One of the downsides of all these services is that you need to memorize text-message shorthand for each one. Most of the commands are simple, but with Amazon, for instance, things get a little complex when you're trying to request a payment from someone.

Amazon TextPayMe

Impossible? No. But if you still haven't figured out that ALT + F4 closes windows on your PC, then you might want to stick with PayPal's user friendly iPhone app.

Wednesday, February 24, 2010

Time to get back up to date

After a very long hiatus, I'm going to brush the dust off this blog and get myself back up date on what has been going on in Mobile Payments world lately.

An excellent place to start is Wired magazine's recent article on the Future of Money:

The New Ways
to Pay

The credit card is in decline. Here are a few hints of what might replace it. — D.R.


Type a friend’s Twitter handle, a dollar amount, and twitpay to transfer funds to their PayPal account.


Instead of entering credit card information anew for every online purchase, users fill in their phone number and the charge shows up on their monthly bill.


The latest from Twitter cofounder Jack Dorsey, this 3/4-inch cube turns any iPhone into a credit card reader.


This mobile app uses PayPal to enable charities to accept small donations without the usual exorbitant credit card transaction fees.

Hub Culture

Travelers can avoid the hassle and fees of swapping dollars for euros by transacting in virtual currency in this international network of workstations.

Tuesday, February 17, 2009

MMA Publishes Mobile Banking Overview - 160 Characters


Submitted by Mike Grenville on Thu, 05 Feb 2009 10:58

A free overview of the marketing opportunities represented by the mobile channel for the financial sector has been published by the Mobile Marketing Association.

The Mobile Marketing Association (MMA) has published a Mobile Banking Overview; an educational resource designed to provide analysis of the marketing opportunities and attributes that the mobile channel represents for the financial sector.

Subjects include market size, consumer-focused mobile banking products and services, and the mobile media channels available to banks and other financial institutions. It also provides considerations for optimizing mobile banking communications and campaign effectiveness within each channel.

“As mobile commerce becomes more secure, we will see a paradigm shift in the way people do their banking,” said Sean Moshir, CEO of CellTrust and Mobile Banking Sub-Committee Co-Chair at the MMA. “We believe that mobile banking will parallel the Internet era in many aspects, leading consumers and financial institutions alike to become more comfortable with mobile transactions. ”

The overview is the result of ongoing member collaboration with the MMA North America Mobile Banking Sub-Committee of the MMA Global Mobile Commerce Committee. The Mobile Banking Overview includes participation from the following MMA Mobile Banking sub-Committee member companies: Acuity Mobile, AT&T Mobility, CellTrust Corporation, Fidelity Investments, Silverback Media, Sprint, VeriSign, Inc., Verizon Wireless, Virgin Mobile, USA and Washington State Employees Credit Union.

“The improved user experience across handsets and networks and better browsing capabilities associated with the mobile web have resulted in significant growth in the mobile banking market over the past several years,” said new MMA President and CEO Mike Wehrs. “Many financial institutions already offer some form of mobile services for their customers, and the MMA is seeing mobile usage rise for personal banking. The Mobile Banking Overview is an important step towards the formulation of guidelines around the service, and a great addition to existing MMA educational resources.”

Mobile is at around the point that internet banking is when it took off around 1998, and is set for rapid take up according to the report. 30% of US households will bank using their mobile in 2010 according to Celent.

In spite of the character limitation, SMS is seen by the report as a key tool to drive the take up of mobile financial services. Benefits of SMS noted by the report include that it works across all networks, is easy to use by consumers, can be used straight away without needing a special phone or installing software, and enables the bank to provide real time financial information to customers.

The report also considers the issues around secure SMS when it is combined with a handset client. While noting that this can increase not only security but the amount of information that can be provided to the customer, the number of handsets able to take advantage becomes severly restricted and there is likely to be an increase in suctomer service and support issues.

For a bank in particular there are security issues to consider and the report touches on some of the strengths and vulnerabilities of SMS and the GSM network for transmission of confidential data.

The free 13 page MMA Mobile Banking Overview can be downloaded from

Wednesday, November 26, 2008

Beem from Mobile Sense makes no sense whatsoever

Does no-one remember the hard-learned lessons of LUUP in the UK? I can't believe that someone else is giving the exact same model a go, especially as nothing in particular has changed in the consumer-need profile or technology maturity profile....

Hope they have the same millions that LUUP's backers do...

m-Payment: Beem Money In The UK

Submitted by Mike Grenville on Mon, 17 Nov 2008 13:31

A new mobile cash transfer and payment system using SMS has been lanched in the UK.

Mobile Sense has launched a mobile cash and payments system called Beem that via text messaging. Using SMS, it can be used by anyone, on any mobile handset, across any network, and is not tied to any bank.

Users load up their Beem account and 'beem' it to pay for goods and services as well as send money to friends and family. All cash transfers take immediate effect and users can have access to their Beem account 24 hours a day, seven days a week, irrespective of location.

Simple SMS Sign Up

Signing up for the service is as simple as sending an SMS. New subscribers simply text 'hello' to Beem 07781 484668 and once they receive a response text back they can choose a password of between 4 and 8 characters to continue. Sign up is free online or just the cost of a text through a mobile phone and once registered users can load up their cash via their debit card and also beem any cash they receive back to their bank.

The only charges for using the service are the costs of sending the texts which are covered by a user's network operator price plan. The service is totally secure and subscribers' details are all kept completely private. Users can even protect their debit card details with a second password.

Kerl Haslam, Beem founder and CEO, said: "Users can even use our 'bank it' facility to text money back to a bank account. If you now forget your cash card or money, there is no need to go via an ATM to get cash, with Beem you can load cash into your account through a simple and secure text message and have access to cash within seconds."

Short Merchant List

The company makes money by charging a small commission fee to the providers of goods and services, similar to how credit card companies charge. It also charges a fixed fee of 75 pence for users to transfer money from a mobile wallet to a bank account.

Businesses that sign up as a Beem merchant will be able to accept secure payments from customers via text either in store or remotely. The service requires no additional hardware or software. Beem also provides merchants with SMS text, opt-in, opt-out, marketing opportunities. Merchants on board so far with Beem in the UK include several pizza chains, taxis firms and University students unions at Brunel and Hertfordshire. However this short list is not going to generate mass adoption and for it to become "real mobile money" as it claims it will need a wide range of merchants or a cluster for a particular market niche.

The company is in discussions with the London Organising Committee of the Olympic Games for a cashless payment solution for tickets, travel and merchandise in 2012.

Strong Competitors

It has some strong competitors already who, although they have made progress, are still not yet mainstream. For example in the UK PayPal launched mobile in 2006 and started with over 10 million subscribers with 164 million accounts worldwide, though how many use PayPal Mobile is not known. There is also the TextPayMe service that is now powered by Amazon Payments and Luup and Anam Mobile to name a few.

In addition to pushing into the UK market, Mobile Sense has an ambitious aim to be a global company with at least one branch on each continent in the next three years with a global franchising programme through 2009 to cover Brazil, Israel, Africa, Russia, and China.

While in theory mobile payments is a good idea, for it to really take off it has to meet a real consumer need and remove a pain point that they experience. While in some parts of the world such as Kenya, where a large portion of the population are unbanked this has happened, to become widespread in the UK Beem will struggle to find a way to capture both merchants and consumers imagination.

NBAD launches mobile payments in Abu Dhabi - 160 Characters

m-Payment: SMS Bank Payments In Abu Dhabi

Submitted by Mike Grenville on Mon, 17 Nov 2008 15:20

The National Bank of Abu Dhabi (NBAD) has rolled out an SMS based payment service that allows customers to access their bank accounts via mobile phones to pay, send, and receive money.

With the NBAD Arrow service, account holders can make a range of payments and money transfers instantly and securely from their mobile phones. This is the first in an 18-month roll-out plan agreed between NBAD and Luup which will extend to remittances, salary payouts, merchant payments and bill payments.

In the first stage of the roll-out, users can make transfers from their NBAD bank account to anyone in the UAE using their mobile phones. If the receiver is also an NBAD Arrow service user, the money goes straight into their bank account, otherwise the amount can be withdrawn from any NBAD ATM within 24 hours by using a code received via SMS.

To send money, users send PAY, the recipient's mobile phone number, the amount and the secure ID token code to 2666. So for example SMS: Pay 0519123456 300 123456 This will send 300 dirham to the person with mobile number 0519123456 with the example secure token code 123456.

In addition, users can pay utility bills as well as donate to charities like the UAE Red Crescent.

Mobile penetration rates outstrip Internet penetration rates by far in the Middle East region and in the UAE it is over 100 percent.


NBAD is a pioneer in the m-payments space because the bank’s senior management realized early on that the existing payment systems lag behind the available technology. NBAD has received many prestigious awards for its innovative products and services. Last month, the bank won ACN Arab Technology Award for Banking & Finance project implementation and CIO of the year and one of the systems the jury especially lauded was our ‘SMS Money Transfer’ service,” said Mr. Ahmed Al-Naqbi, Senior Manager, Channels and Electronic Banking Services at NBAD.

During the launch promotional period, all Arrow services will be FREE until 9th January 2009. Afterwards sending money to anyone in the UAE wil cost 3 AED (0.54 GBP) and paying a bill or donating to a charity will be 1 AED (0.18 GBP) + 2% of transaction value.

Paybox expands its mobile payment service - 160 Characters

m-Payment: Sybase 365 Partners With Paybox

Submitted by Mike Grenville on Tue, 18 Nov 2008 10:51

The partnership agreement between Sybase 365 and mobile payment solutions paybox will extend mobile payments and mobile money services to customers worldwide.

Financial institutions, mobile operators and merchants will now be able to offer their customers various mobile payment services such as payments for goods and services, money transfer and mobile airtime top-up more easily.

Sybase 365 already offers mobile payments via premium SMS billed and mobile banking services. With this agreement financial institutions, mobile operators and merchants will be able to offer their customers mobile payment services including payments for goods and services, money transfer and mobile airtime top-up.

“paybox and Sybase 365 will offer solutions for mobile payments and person-to-person money transfer targeted at both emerging and developed markets” said Matthew Talbot, vice president, mCommerce, Sybase 365

Eckhard Ortwein, CEO paybox said that “This agreement is a natural progression of where the market is headed and what customers are demanding from their mobile phones. By combining mobile messaging and mobile payments offerings, Sybase 365 and paybox are establishing a global standard for mobile commerce services” he said.

An officially certified GSMA Mobile Money Vendor, paybox covers the entire value proposition for emerging markets where mPayment, mBanking and mCommerce solutions create low cost banking services for the unbanked. paybox is behind the mpass SMS payments with O2 and Vodafone recently launched in Germany and has been selected as a finalist for the ‘CHANGING LIVES AWARD’ at AfricaCom.

Tuesday, October 14, 2008

New E-Monday rules coming out of Brussels - reported on the Register

Brussels bemoans low take-up of electronic cash

It's as if the people don't trust the financial system

The European Commission has launched a new legal framework to boost the use of "electronic money" within the EU, even as we all realise we had even less real money than we thought.

The Eurocrats have admitted that earlier utopian predictions that we’d all be loading cash on our mobile phones, travel cards or internet accounts have proved to be somewhat overblown. In part, it is blaming itself, saying current rules “have hindered the takeup of the electronic money market, hampering technological innovation”.

Translated, this means the foolish peasants (the rest of us) have refused to stop keeping anachronistic wads of notes and piles of coins in stupid places like pockets, in wallets, under mattresses, that sort of thing, when what they really should be doing is paying smart young things to take their money and convert it into cyber cash, loaded on trustworthy items like phones, Oyster cards, servers and deelie boppers.

So, in the interests of keeping the dream alive, Brussels has proposed a new framework for “issuing electronic money”. This will include a “technologically neutral and simpler definition”, ie that electronic money is “monetary value stored electronically on receipt of funds and which is used for making payment transactions". This will include e-cash stored on devices in the holders' possession or “remotely at a server.”

Brussels also promises a “new prudential regime”, which it promises will ensure “greater consistency between prudential requirements of electronic money institutions and payment institutions under the Payment Services Directive”.

This will include an initial capital of €125,000 “enabling market entrance for smaller players and a new formula to determine ongoing capital”.

If this sounds like a recipe for small fly-by-night operators to barge into the cyber economy, let’s just consider what a mess the old established financial players have made of the real economy over the last few months.

The Commission reckons these changes will give the market a shot in the arm, and “estimates show that this industry could reach a volume up to €10bn by 2012”.

The only thing missing? A reason why consumers – as opposed to financial institutions and other corporations - would actually want to move to electronic versions of cash. See if you can find one in the Commission’s working document here. ®

Monday, October 13, 2008

Stats & Research: Mobile Banking Becoming A Reality

Posted on 160 Characters Association

Submitted by Mike Grenville on Mon, 06 Oct 2008 12:47

A study earlier this year suggests that mobile banking is becoming more of a reality and that while consumer education remains key to widespread adoption there are a number of outdated misconceptions that the study by Sybase 365 tries to change.

The results of a survey completed in February 2008 (“Mobile Banking: The Second Wave. Global Mobile Banking Survey 2008”) commissioned by Sybase 365 showed that some 34% of banks offer mobile services to customers and an additional 32% plan to offer mobile services in the next 12-24 months.

Although there have been many attempts to bring the benefits of mobile to consumers, the response from the market so far has been measured at best. However the research conducted among 32 European banks, 30 US banks and 30 banks from the Asia-Pacific region concludes that the next two years will see a second wave of mobile banking provision and adoption taking the lead from early adopters in Europe and Asia.

Banks To Double

According to the survey, the number of banks offering mobile banking is set to double in the next two years and the number of customers using mobile banking services is also expected to increase significantly from existing levels. If respondent intentions play out, the number of banks that do not offer mobile banking will be in the minority by 2010, rather than the majority, as is the case today. “The potential of mobile banking has been discussed for quite some time,” said Matthew Talbot, vice president, mCommerce of Sybase 365. “While it has been slower to emerge in North America than elsewhere in the world, mobile banking is becoming more of a reality each day. This is largely due to technical issues around standards and interoperability being resolved and the availability of more robust technology platforms such as Sybase mBanking 365."

Dispelling The Myths

There are some myths around mobile banking that the report hopes to dispel. Some of these are:
  • Mobile banking is not secure. Misconceptions around security stem from consumers’ lack of experience and geographical penetration of mobile banking services. The 2007 survey (Sybase 365, commissioned Consumer study: “Nano-economics: Mobile Opportunities for the Financial Sector”) revealed that 63% of European respondents; 83% of Australian respondents, and more than half of respondents from the Americas who use mobile banking services, state that mobile banking is secure or very secure.

    Clearly, a vital step in dispelling this myth lies in education, availability and usage. The 2008 survey found that 71% of banks are doing just that by using mobile alerts to help boost consumer confidence in mobile banking services. Customers’ mobiles devices can actually help improve security because they can be used as an alternative to PIN tokens for identification. Mobile alerts can also be set up to notify customers of fraudulent activity on an account, enabling a rapid response leading to increased confidence for mobile services.

  • Little consumer demand for mobile banking solutions. In fact, one in three mobile users said they would like to be able to deal with their finances ‘on the move’. Almost one-quarter of consumers surveyed said they would consider switching banks if they were offered mobile banking services.

  • Additional Charges. Some believe that mobile banking is just another way to charge customers for additional services. However some 87% of respondents to the 2008 survey cited the reason their bank implemented mobile banking services was to improve the overall customer experience.

  • For financial institutions, mobile banking is only about cost savings. Certainly mobile banking can lead to cost savings. The 2008 survey revealed 65% of financial institutions who focus on growth from existing customers have introduced mobile banking services to reduce customer service costs. However many financial institutions are using mobile solutions as a way to extend customer services such as PIN reminders or dispute resolution and are recognizing mobile as a new channel to reach customers with marketing, promotions and related offers.

  • It only means Balance Checks. It is another myth that when financial institutions talk about mobile banking they’re referring to the ability to check an account balance or stock prices via a mobile device. While that is a goo dplace to start, financial institutions are increasingly offering a wide-range of mobile services. In fact, nearly three-quarters of 2008 survey respondents said they provide customers with the ability to do money transfers and nearly 30% allow customers to do bill payment via a mobile device.

Untapped Potential

There is a great deal of potential ways that mobile can be used in the banking world. For example many bank customer call centers are burdened with rudimentary account enquiries that can easily be alleviated with SMS-based services. However the study only found that 15% of banks sent a statement by SMS following a telephone enquiry.

With those financial institutions currently offering mobile banking services seen as somewhat ahead of the curve in terms of provision, it is unfortunate that 58% of them agree that the CRM potential created by mobile data is not best utilized at present.

The report concludes that while the first wave of mobile banking services was a steep learning curve, the second wave is comprised of a more informed provider community and a more enthusiastic customer base, both of which suggest a promising two years ahead.

Download a free copy of the Sybase 365 mBanking Study here.

Friday, August 08, 2008

Grameen Bank & Obopay Partner - Portfolio.com

Aug 5 2008 6:48AM EDT

Mobile Banking for the Poor

At a press conference this morning in Mumbai, mobile-banking company Obopay announced an alliance with Grameen Solutions -- an alliance with an extraordinarily ambitious goal. In ten years' time, the companies said, they would like to see 1 billion of the world's poor -- people living on less than $2 a day -- receiving banking services via their mobile phones. It probably won't happen, but it would be amazing if it did.

Mobile banking is not new, of course, although it is still young. What sets this particular initiative apart are three things: its global ambition, its emphasis on the poor, and the central role of microfinance institutions (MFIs).

Mobile banking is of course banking, and banking is regulated nationally, not globally. As a result, it's hard to scale mobile banking across borders -- but that's precisely what Obopay and Grameen are trying to do. They're starting in India and Bangladesh, with a small core team of engineers looking carefully at what works and what doesn't in the real world. They will then offer that expertise to anybody in the world who wants it, and plan to entrench themselves as a "center of excellence". If MFIs in Congo or Nicaragua want to team up formally with Grameen and Obopay, that's fine; if they just want to talk to them to get advice on how to proceed on their own, that's fine too.

In any event, the system being set up by Grameen and Obopay is designed from the beginning to be able to handle payments and remittances not only nationally but also internationally. The problem of domestic remittances is often overlooked: large cities like Dhaka are home to millions of migrants who would love to send money back to their families elsewhere in the country but who are unbanked and have no real means of doing so. The ability to remit money domestically with little more than a text message could be revolutionary.

Then, of course, there's international remittances -- which already account for an enormous part of the annual capital inflows into many countries around the world, especially in Central America. Compared to Western Union or banks, the ability to send money directly from mobile phone to mobile phone is orders of magnitude easier and cheaper.

Then there's the emphasis on the poor. Although the poor are more likely to be unbanked and therefore in need of mobile banking services, they haven't been directly targeted by many of the first wave of mobile banking providers. As Gautam Ivatury and Ignacio Mas write in their excellent overview of the situation as it stands today,

Providers experimenting with a new technology or business model typically seek to reduce risk by focusing on known markets (avoiding the "double gamble" of new business model and new customer segments), and within those on likely "early adopter" subsegments (i.e., those more naturally predisposed to try the new offering).

The poor, of course, are both a new customer segment and generally the very last adopters of any new technology. It's hard to sell banking services to someone who neither knows nor understands what a bank is.

So that's where MFIs come in: they can play a crucial role in reaching out to, and educating, potential customers among the world's poorest people.

Grameen Solutions' CEO, Kazi Islam, told me that I shouldn't try to extrapolate forwards from where mobile banking stands today, but rather work backwards from the needs and capabilities of the world's poor. MFIs have been reasonably good at extending credit to such people, but they've found it much harder to offer savings accounts, since banking licenses are hard to come by.

Other financial services, like microinsurance -- especially crop insurance for people working small plots of land -- have barely gotten started: insurance "doesn't make sense if it costs 20 rupees to collect 25 rupees," said Islam at the press conference. "It's all about reach, and cost and operational reasons make it difficult to reach these people."

With mobile banking, reach is effortlessly expanded, piggybacking on the massive investments made by mobile-phone companies. Meanwhile, costs are tiny: in the US, Obopay's money-transfer fee is a flat 25 cents for any amount up to $1,000.

All the same, the goal advanced at the press conference this morning is so ambitious that I give it only a small chance of success. One big reason is China: without access to China's rural poor it's going to be almost impossible to reach the 1 billion goal. And while China's rural poor are getting cellphones at an astonishing pace, the chances that they'll be able to plug them in to a global -- or even national -- payments system still seem remote. On the other hand, no one imagined ten years ago the progress that China has made to date; if you extrapolate that rate of change, anything is possible.

Another risk is that the goal will be reached but in name only: people might have mobile-banking accounts, and might even automatically get such an account when they get their phone. But the accounts might not be used, and insofar as they are used, they might be used only for payments and not for real banking services. It's relatively easy to see a world where mobile phones are used as mobile wallets, containing roughly as much money as one might have in a real-world wallet. It's harder to see a world where mobile phones are used as mobile bank accounts, home to individuals' life savings.

There's also the effect which mobile banking might have on repayment rates at MFIs: experience in Kenya suggests that letting people make their loan payments via mobile phone rather than in person at a group meeting results in higher delinquency rates.

And insofar as mobile banking does take off, it will inevitably and necessarily do so primarily via the mobile phone providers themselves. Depositing money into one's mobile bank account must never be harder than buying extra airtime for one's phone; ultimately there's no reason why airtime charges can't come straight out of the bank account, combining the two accounts into one. What's more, mobile operators already have a network of agents licensed to accept cash on their behalf; it seems silly to try to build a parallel bank-agent network from scratch.

It's a great idea for banks and MFIs and mobile phone companies all to pull together in the same direction, resulting in a global open system which benefits from massive network effects. But with a couple of big exceptions like Grameen, and possibly not even there, the MFIs will always be dwarfed in size, reach, and importance by the mobile-phone operators. The MFIs risk being marginalized, to the point at which the poor get forgotten in the drive towards broader mobile-banking adoption. And without MFIs to help guide the way, the chances are that the poor won't embrace mobile banking of their own accord.

Obopay CEO Carol Realini understands this. "The carriers could be the MFIs, but you don't want to take away from the MFIs," she told me. "They serve the customers, and they're part of the last mile to the customer. They offer services beyond transactions. They're underwriting loans and coaching customers. Having the MFI play an active role with the poorest people is great, because they're not comfortable with credit and savings. The MFIs make the approach to the poorest people that much better, and it helps them understand how to use this powerful new tool."

The promise of mobile banking for the poor is that mobile phone providers have managed to get a degree of penetration among the world's poor that MFIs can only dream of. But that's also the peril. The mobile phone providers are likely to continue in the direction they're headed in at the moment: staying away from banking regulation, confining themselves largely to payments rather than fully-fledged banking, and targeting their entire customer base without any particular emphasis on the bottom of the pyramid. The MFIs, by contrast, are going to want something which is both narrower and more ambitious. Will the mobile phone companies sign on, even if they see lots of regulatory headaches and very few profits by doing so? The answer to that question could be the answer also to whether Obopay and Grameen Services will come close to achieving their 10-year goal.