What is Mobile Banking?

How do you reach a Billion people with a cell phone, but no bank account?  Easy - run your bank account through your phone.  Mobile banking allows individuals to add money to their account, and then spend it by sending the money to a merchant's phone.  See a video from the BBC on how Mobile Banking by phone works.

While mobile banking has been able to overcome some banking challenges, it cannot as easily overcome illiteracy or extreme poverty for those who cannot afford a cell phone.  In Africa, more stable, richer countries with mobile infrastructure have been the first to receive these types of services.  The higher literacy rates and cell phone penetration make them less risky options.

Internet Banking Booms with Mobile Banking Still in Infancy

Even so, mobile banking was making big inroads into some of the more developed nations of Africa in late 2009, and has continued to spread since.

Although the developing world was beginning to embrace mobile banking, in the US a September 2009 survey shows that only 1% of people preferred  mobile banking to other methods.  At that time, the break through was that internet banking had just taken over as the most preferred method of banking.

View the detailed Survey: Consumers Perfer Banking Online at Marketing Daily.