mBanking Makes the Papers

The latest Economist covers the powers and wonders of mBanking-- it's good to see the subject getting attention from the foremost weekly newspaper of the former British Empire. M-PESA, the success story from Kenyan mobile operator Safaricom, gets some attention in the article, which then extrapolates outward:

Extending mobile money to other poor countries, particularly in Africa and Asia, would have a huge impact. It is a faster, cheaper and safer way to transfer money than the alternatives, such as slow, costly transfers via banks and post offices, or handing an envelope of cash to a bus driver. Rather than spend a day travelling by bus to the nearest bank, recipients in rural areas can spend their time doing more productive things. The incomes of Kenyan households using M-PESA have increased by 5-30% since they started mobile banking, according to a recent study.

Why haven't wmBankinge seen more of this? Well, it's a combination of banks nervous about losing market share, government regulators nervous about fraud, and existing laws that prevent corner-shop retailers from behaving like banks.  But there are ways around (or through) these obstacles, says the Economist's usual omniscient-sounding editorial voice:

Instead of lobbying against mobile money, banks should see it as an exciting chance to exploit telecoms firms’ vast retail networks and powerful brands to reach new customers. Tie-ups between banks and operators will help reassure regulators. But they, too, need to be prepared to be more flexible. People who want to sign up for mobile-money services should not, for example, have to jump through all the hoops required to open a bank account. Concerns about money-laundering can be dealt with by imposing limits (typically $100) on the size of mobile-money transactions, and on the maximum balance. And inflexible rules governing the types of establishments where cash can be paid in and taken out ought to be relaxed.

Mobile money presents a shining opportunity to start a second wave of mobile-led development across the poor world. Operators, banks and regulators should seize it.

(h/t MSB)

UPDATE: Silly me for missing this-- the above article actually comes out of a whole special report in this week's Economist devoted to telecom in the developing world. Six more articles for your consumption!:

Mobile marvels
Poor countries have already benefited hugely from mobile phones. Now get ready for a second round, says Tom Standage

Eureka moments
How a luxury item became a tool of global development

The mother of invention
Network operators in the poor world are cutting costs and increasing access in innovative ways

Up, up and Huawei
China has made huge strides in network equipment

Beyond Voice
New uses for mobile phones could launch another wave of development

Finishing the Job
Mobile-phone access will soon be universal. The next task is to do the same for the internet