Magazine article American Banker

Mobile Operators Urged to Expand Payment Services

Magazine article American Banker

Mobile Operators Urged to Expand Payment Services

Article excerpt

Byline: Thad Rueter

PARIS - Mobile payment systems have become an important financial tool in the developing world, but experts say network operators need to offer more than just person-to-person transfer features to create a compelling business case.

Nick Norman, the commercial manager for the U.K. research firm Consult Hyperion, said mobile phones are emerging as a financial lifeline for the 15% of the world's population that lives on $1 or less per day, and such services offer a significant business opportunity.

"If you are a vendor or" carrier, "this is a place to play," Norman said here Tuesday at the Cartes and IDentification conference.

The best example is in Kenya, where the M-Pesa service now has 7 million subscribers and processes $2 million per day in transactions, averaging about $20 each.

Consumers with mobile phones use the service to send each other money, and can load funds into their accounts or convert the stored value into cash through a nationwide network of agents.

The Kenyan carrier Safaricom Ltd. and the U.K. wireless company Vodafone introduced M-Pesa in 2007 with help from the United Kingdom's Department for International Development.

Norman said the M-Pesa service has replaced such traditional, and inefficient, transfer methods as handing an envelope of cash to a bus driver and hoping the money reaches the intended recipient in another location.

But basic transfer services might not offer a significant return to network operators. …

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