M-banking in Africa

Copyright: kipcurry

According to an article published in Forbes, mobile banking in Africa have been revived by the extraordinary success of Kenyan cellphone operator Safaricom's M-Pesa money transfer facility
mobile banks in Africa faces some challenges:

--Take-up
Far from reaching the unbanked, m-banking services have largely been targeted at existing customers, and even in this case takeup rates have been low. Moreover, active use of accounts has tended to drop off and most customers limit their usage to airtime top-ups and person-to-person payments.
--Complex transactions
Despite the considerable technological advances in the past decade, using a mobile handset to conduct transactional banking remains considerably more complex than using an ATM. Easier technology and more customer education would be required for m-banking to develop mass appeal.
--Regulatory compliance
In developing new financial payments systems, cellphone operators have escaped the regulatory burden faced by banks because they do not, strictly speaking, take deposits. Any attempt by cellphone operators to move beyond cash transfers or purchases of prepaid products into providing a wider range of financial services would encounter this regulatory burden.

In addition to meeting liquidity reserves to protect depositors, cellphone operators would also have to comply with a bewildering and costly array of secondary legislation, including:
--know your customer (KYC) rules
--anti-money laundering regulations
--countering the finance of terrorism legislation