Bank In Your Mobile Phone

Bank in your mobile phone? Could this be the beginning of the end of banking as we know it? With the advent of mobile phones, some mobile phone companies have introduced innovative services that have caused shockwaves in the banking industry.

Take the hugely successful MPesa for example. This product by Safaricom of Kenya is probably the first to employ real mobile banking technology in the world and is the most widely used bank in your mobile phone service in the world. It currently boasts of more than 5 million registered users in the country and the number is growing.

At first the main stream banks ignored it hoping it would not compete their services. Then they realized the thing was gaining popularity among the low and middle income groups. The exponential growth registered by the new bank in your mobile phone service caused a national panic and they immediately sought the protection of the Central Bank, the monetary regulator in the country. But then the horse hard long bolted. So popular had MPesa become with the ordinary folks that they threatened to boycot ordinary banking services if it was discontinued for any reason. Naturally CBK had to play ball otherwise the ordinary folks could have revolted in a scale beyond comprehension. MPesa was unconditionally allowed to operate.

Realizing that fighting the bank in your mobile phone product was not an option, smarter banks decided to embrace MPesa. In fact a number of them have already registered as agents of this new kid on the block. It is just a matter of time and the rest will follow suit. They simply do not have a choice.

So what is this MPesa thing and how does it operate?

Well, mobile banking is not new in the market because most banks now employ mobile phone technology to enable customers access simple transactions such as balance enquiry, mini-statements and purchase of air-time.

M-PESA, the new bank in your mobile phone technology is different in the sense that the service allows you to use your mobile phone to carry out important money transactions that were hitherto a preserve for banks. The service is available to all members of the public, even if you do not have a bank account or bankcard. Available services include cash deposit, cash withdrawal, funds transfer, balance enquiry, direct purchase of air time among others.

The most interesting bit is the fact that Kenya is the first country in the world to introduce the bank in your mobile phone service, which is offered by Safaricom - the main mobile phone operator in the country.

The facility was initially intended to assist the poor rural folks who do not operate bank accounts to access money transfer services within reach. People who work in towns found it convenient to send money to their distant relative through the bank in your mobile phone service. They also discovered that apart from the transfer, you could actually retain the balance in your phone until such a time that you were ready to transfer or withdraw it. Most people now maintain huge balances in their mobile phone banks.

The other convenience with the bank in your mobile phone is the many M-Pesa agents who are spread all over the country and operate 24 hours thus making it easy to access the service anywhere.

On security issues, I would give M-Pesa a 9 out of a scale of 10. It is almost impossible for an un-authorized person to access the money, unless he has access to the security code given to the account holder. Even when you lose your phone, the bank in your mobile phone balance is still secure! All you need to do is report to Safaricom and a new SIM will be issued with your account balance intact.

HOW TO DEPOSIT CASH
All you need to do is go to an M-PESA Agent and:
1. Give him the cash and your mobile phone number
2. You and your Agent will receive SMS confirming the deposit

HOW TO SEND MONEY
3. On your M-PESA phone menu, select “Send Money”
4. Enter recipient’s phone number, the amount and your PIN
5. You and the recepient will receive SMS confirming the transfer

HOW TO GET CASH
If you are a registered M-PESA Customer
Go to an M-PESA Agent and:
1. Give your phone number and show your ID / passport
2. Go to your M-PESA menu, select Withdraw money
3. Enter the Agent number, the amount and your PIN
4. You and your Agent will receive an SMS confirming the transfer
5. The Agent will then give you the cash

If you are not a registered M-PESA customer but have received notification of money transfer to you
Go to an M-PESA Agent and:
1.Give your phone number and show your ID/Passport
2.Give the code in your SMS from M-PESA.
3.The Agent will do the transaction on your behalf using his phone.
4.You and your agent will receive an SMS confirming the transfer.
5.The agent will give you the cash.

Just like that! Can you see now why the banks are up in arms against the bank in your mobile? I think they are justified - if they must survive.