Imagine life today without your mobile handset! Inconceivable, isn’t it?
While the mobile handset has undoubtedly become the centre of many people’s social existence due to the prevalence of social networking through platforms such as Facebook, Twitter, Google+ and others, indications are it won’t be long before mobile devices become the centre of most people’s commercial existence as well. Now that they can transfer and receive money via their mobile handsets, clued-up and tech-savvy consumers are already thinking about a time when they would be able to conduct transactions such as buying movie and concert tickets, pay for groceries and pay restaurant bills at the touch of a button on their Smartphone. This wish list presents limitless possibilities for Zimbabwean banks to partner with a raft of other value chain players such as cinema operators, pharmacies, supermarkets and fast-food outlets.
Mobile phone penetration has exploded in Africa since 2000, as it has elsewhere in the developing world, according to the African Development Bank. In 1998 there were fewer than two million mobile phone users in Africa, but by 2009, the number had grown to over 400 million. Bankers are therefore increasingly enamoured by the enormous potential of reaching millions of prospective customers, especially the rural population who account for more than 60% of Africa’s total population and previously had no access to banking services. In Zimbabwe for instance, only 1,1 million (about 10%) people have bank accounts, compared to the eight million who possess mobile phones.
Zimbabwean banks and their partners are therefore increasingly embracing mobile as a distinct channel — not just as a supplement to Internet banking and are delivering mobile banking platforms with money transfer, balance enquiry, airtime purchase and bill payment capability. Econet is in partnership with TN Bank for the EcoCash product. Telecel initially partnered with Kingdom Bank to deliver Skwama, NetOne teamed up with FBC Bank Limited on the OneWallet mobile banking facility while CABS partnered with Zimswitch and Telecel to launch Texta Cash. These players, however, still face the challenge of building consumer confidence in mobile money.
Zimbabweans still love the feeling of hard cash in their hands. A variety of communications channels are needed in order to continually educate consumers. This has seen players, the most notable of which is Econet, extensively using radio and print advertising to increase product awareness, explain ease of use while emphasising the security features and convenience of mobile banking.
Increasing usage of mobile devices make it imperative for brands, not the least of which are banking brands, to start thinking about mobile Internet as an integral part of business communication and commerce.
Many Zimbabweans that previously had no exposure to basic financial services are encountering them for the first time, courtesy of mobile banking. This makes it easier for banks to draw such customers into the formal banking system where they can be offered access to a wider and more sophisticated range of products. Given the liquidity challenges currently dogging the markets, we probably won’t go in that direction anytime soon, but in other places such as Kenya, they have one eye on how customers can be allowed to apply for loans via their mobile devices.
In that respect, mobile banking is credited with bringing into circulation money that would have been stored under mattresses where it won’t fully contribute to economic development. Experts also contend that the use of mobile phones is helping banks to overcome the challenge of the last mile, enabling them to deliver financial services to remote rural outposts without having to rely on bricks and mortar. According to Wikipedia, the “last mile” or “last kilometre” is the final leg of delivering connectivity or service from a provider to a customer and the actual distance of this leg may be considerably more than a mile, especially in rural areas.
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Omen N Muza writes in his personal capacity. He is a banker and managing director of TFC Capital (Zimbabwe) (Pvt) Ltd, a Harare-based financial advisory company with interests in banking and agriculture as well as the convergence area between them.
