|Submitted by Mike Grenville on Mon, 18 Feb 2008 11:33|
The GSMA says that 2008 will be a seminal year for convergence of mobile and financial services with money transfer and mobile wallet projects taking off. The GSMA has called on government regulation to support these initiatives that can benefit millions of unbanked.
The convergence of mobile communications and financial services will see more than 1.4 billion people worldwide benefiting from mobile financial services by 2015, according to new research by Edgar Dunn, a specialist mobile banking and payments consultancy firm, in partnership with the GSMA, the global trade association for the mobile industry. By 2015, Edgar Dunn envisages that 1.4 billion people could be using mobile wallets – software that enables consumers to manage their money, including making and receiving payments, using their mobile phone - from about 10 million at the end of 2007.
The GSMA has been working for the past year to help catalyse this market with two major initiatives – Mobile Money Transfer focused on international remittances and remote banking/payments and Pay-Buy-Mobile focused on transactions at point of sale. Following an agreement with the GSMA, Western Union has reached agreements to deploy mobile money transfer services with Bharti Airtel in India and Globe and Smart in the Philippines.
To help the take-up of mobile wallets, the GSMA is working with Accenture and Fundamo, a supplier of mobile banking and payments solutions, to establish a hosted mobile wallet platform that will enable mobile operators to pilot financial services rapidly and at low cost.
“Momentum is building behind mobile financial services and we believe 2008 will be a seminal year for this exciting new sector,” said Rob Conway, CEO and member of the board of the GSMA. “With the help of governments, mobile networks have the potential to bring the many social and economic benefits of financial services to hundreds of millions of people who live beyond the reach of the conventional banking network.”
Money Transfer Not WalletsHowever not every one is so taken with mobile wallets. Jote Bassi, VP of Global Sales & Marketing at Anam agreed that "Money transfer and mobile commerce is a killer application - much more than mobile advertsing". But he is not so enthusiastic with mobile wallets. "A mobile wallet is all very well but essentially it means the operator becomes a bank and so it is much more dificult to launch a wallet than money transfer. At the back end is an instruction to the existimng banking structre rather than storing money on the phone" said Bassi.
Changes Needed To Government RegulationThe Edgar Dunn research also found that the number one barrier to successful deployment of mobile wallets was government regulation. The GSMA is calling on governments to ensure that regulation governing the deployment and usage of mobile financial services is proportionate to the risks involved.
Balanced regulation can help increase access to financial services for poor people and is one way to fight poverty, according to a new report on regulating mobile banking from CGAP (Consultative Group to Assist the Poor), a global resource center for microfinance. “Mobile telephony promises to radically transform the way people use financial services in rich countries and in poor ones,” said Elizabeth Littlefield, CEO of CGAP. “Wireless may also allow us to reach people conventional business models never could reach, bringing them for the first time the ability to manage their own household finances, safely storing cash, moving it, spending it or investing it when needs or opportunities arise."
“For regulators, it’s not viable to simply do nothing. Current regulation tends to be both over- and under- protective,” says Tim Lyman, CGAP’s Senior Policy Adviser and co-author of the Focus Note. “Being too restrictive can mean fewer people in the formal financial system, and higher costs to access services. But policy makers also need to be aware of potential protection gaps.”
Mobile Money Summit 2008 14-15 May Cairo, Egypt–