MWC: Mobile banking gets global push

The GSM Association, known for tackling causes related to furthering the wireless industry, has made mobile money a focal point of its efforts at this year’s Mobile World Congress. With financial backing from the Bill and Melinda Gates Foundation, a partnership with Visa and a growing ecosystem of vendors supporting the cause, the GSMA will target emerging markets where much of the population has access to a cell phone, but no bank account.

The Bill and Melinda Gates Foundation -- Gates’s charitable organization and focus of his time post-Microsoft -- and the GSMA launched a program this week to expand the availability of financial services to the developing world – all through mobile phones. Dubbed Mobile Money for the Unbanked (MMU) and backed by a $12.5-million grant from the foundation, the program will work with mobile operators, banks, microfinance institutions, government and development organizations to spread mobile financial services to unbanked populations.

According to the GSMA and microfinance center CGAP and McKinsey & Co., there are more than 1 billion people in emerging markets that don’t have a bank account but do have a mobile phone. They forecast mobile money for the unbanked to be a $5-billion market opportunity over the next three years. Software vendor Redknee estimates that actually closer to40% of the world’s population does not have a bank account, yet more than 60% have access to a mobile phone. This unbanked population is not only in emerging markets either; it’s also prevalent in the United States, primarily amongst the migrant worker population.

Redknee provides converged billing, rating, charging and policy for voice, messaging and data services for 70 network operators spanning 50 countries. This week, the company announced that Uganda Telecom will provide its Mobile Money 2.0 platform to its consumers, allowing them to pay for good and securely store and transfer funds with their mobile phones. In Uganda, 90% of the 5 million households don’t have a bank account, so Redknee will be providing the sole banking platform. The company is also deploying its mobile money services in East Africa where the operators, vendors, financial institutions and even regulatory bodies are coalescing around mobile banking initiatives.

Africa, along with the Middle East, are two prime markets for mobile money transfers, according to research firm Ovum, which forecasts that mobile money transfers in these regions will grow from $1 billion in 2008 to $20 billion in 2012. Principal analyst Eden Zoller said that the MMU should have an effective agenda not just for unbanked consumers, but for the mobile operators as well. Vodafone Safaricom’s M-Pesa service in Kenya, for example, had 4.2 million users by the end of Sept. 2008, transferring small sums totaling around 100 million Euros (about $126 million) of funds every month.