The Ugandan Experience in Mobile Banking
New York-based MAP International, through its Business Call to Action initiative, seeks to remove barriers – such as physical infrastructure – that prevent 95 % Ugandans from entering the formal financial sector.
To pave the way for a secure, mobile banking system, MAP International developed an identity card that doubles as a debit or credit card. The biometric information is entered into MAP’s system and people are issued ID cards with a magnetic strip that contains this information.. By incorporating biometric information, these cards make it easier for those in underserved and rural areas to access a host of financial products and services while also cutting back on fraud, corruption and crime. Once connected to the mobile banking network, customers manage their money through access points such as automated teller machines (ATM) and electronic Point of Sale (POS) devices. The battery-powered POS interact with SIM cards to bring in a full suite of banking services — deposits, withdrawals, transfers, account statements — to rural areas and function as “human ATMs.” As a spin off effect of this successful venture, a new application is being developed that would connect users with micro lenders.
Summary
The recent experience with mobile banking in Uganda highlights the potential of such an application. Coupled with ingenious ways of using contemporary technologies in networking and security and combining business propositions and offerings and partnerships, such ventures can be made viable. A vast uncovered population in developing countries at the bottom of pyramid once considered a problem to be tackled can prove to be opportunities and challenges in exciting and hitherto unexplored areas.
Easy Banking for Everyone – the Indian Experience
Encouraged by the widespread use of mobile phones (as of November 2009, there are 504 million subscribers in India), the Reserve Bank of India has issued guidelines permitting Mobile commerce known as M-commerce. Through this platform, even nonbanking population can obtain a biometric card and use POS overseen by Banking Correspondent (BC). Banks will subsidize the cost of issue of biometric cards / smart cards. While e-commerce has skipped majority of the population due to the high cost of setting up such channels including computers, m-commerce has the capability to be inclusive due to the widespread use of mobile phones.
Similar solutions based on high-end mobile phones have also been implemented. In this arrangement, all transaction data are held on the mobile phone. Customers are only given receipts of their transactions/account statements. Using this facility users living in remote areas far away from banks can receive their pension or make all bank transactions on their mobile phone. They can also collect payments due to them from government sponsored rural employment scheme. This avoids the legendary intermediaries and the concomitant malpractices.
While there is immense potential for such ventures, experts caution that a well considered approach should be followed keeping in view the concerns of money laundering, financial terrorism and stability of payment systems.
Reference:
http://bcta-initiative.org/wp-content/uploads/2010/02/1930-UNDP-BCtA-Case_Map_LR3.pdf
http://jackfruity.com/2010/04/mobile-money-is-the-mobile-secure/
http://www.mymobile.co.in/feature_detail.php?id=173
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