STANDARD Bank plans to expand its cellphone banking and payment services in Africa to tap into a growing middle class that is expected to fuel one of the highest growth rates among emerging markets.
The bank, which already dominates in processing mobile transactions in SA, would use a mobile payment platform developed locally but which would be tailored to meet the unique conditions of various markets on the continent.
"Mobile banking is the future for Africa and we aim to invest in a big way," Herman Singh, CEO of Beyond Payments, the bank’s mobile payment unit, said this week.
Mobile banking and payment is expected to become one of the biggest revenue drivers for banks and telecom companies in Africa, according to a recent report by PwC, the professional services firm.
The cost and lack of bank infrastructure in Africa such as physical branches, ATMs and points-of-sale terminals made mobile banking the least cost delivery channel, bankers say.
FNB said this week it saw potential for further growth in mobile banking after releasing figures that showed it achieved record growth in transactions using cellphone banking technology in December last year compared with the same month in 2010.
Mr Singh said among the African markets Standard was targeting was Nigeria, where it operated as Stanbic IBTC, one of the seven banks that had been awarded a licence to provide mobile payment services.
Despite its large population, Nigeria lacks the sophisticated banking infrastructure that SA has, hence the decision to promote cashless payment of services and products.
"We plan to expand our branch network in Nigeria and specifically mobile money payment when you consider that the country probably only has about 6000 point of sale terminals and maybe about 5000 ATMs," Mr Singh said.
He said sub-Saharan Africa’s unbanked and underbanked population — and its underdeveloped banking infrastructure — presented a unique challenge to develop innovative delivery channels, such as mobile banking.
"Mind you we are talking of a population of 800-million people with purchasing power of $1-trillion, yet there are only 50-million accounts, of which we estimate 80% are in SA," Mr Singh said.
"There are about 40000 ATMs in Africa with the bulk of them in SA which also has about 150000 point of sale terminals compared to just 20 000 in the rest of Africa. On the other hand, there are nearly 500-million mobile phone users in Africa, which makes mobile banking and payment an obvious choice for banking," he said.
In SA, Standard was pioneering the opening of "bank shops" mostly owned by individuals through whom money transfer could be made.
More than 8000 such shops had been opened.
In SA he estimated that Standard was processing about R1bn of the up to R2bn being sent or received via mobile money every month and transacted through point of sale units at retailers such as Shoprite.
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