Banking on the future of mobile money

March 5, 2015

The future of banking is in your pocket.

According to the World Bank, more then 2.5 billion people don’t have access to banking services. In many parts of Africa and Central Asia, fewer than 15 percent of adults have an account with a formal financial institution. But there’s good news: The world’s richest couple think we can do better. In the 2015 Gates Annual Letter, Bill and Melinda Gates describe how technology–specifically, mobile phones–will be key to a future of financial freedom for billions. “Already, in the developing countries with the right regulatory framework, people are storing money digitally on their phones and using their phones to make purchases, as if they were debit cards,” they write.

“By 2030, 2 billion people who don’t have a bank account today will be storing money and making payment with their phones. And by then, mobile money providers will be offering the full range of financial services, from interest-bearing savings accounts to credit to insurance.”

As this Reuters graphic shows, adding cellular air time and making person-to-person payments are the biggest current uses of mobile money. But while the nature of mobile transactions ebbs and flows, the sheer number of people taking advantage of such services could be the key to their success.


World Bank data show mobile service growing rapidly, and in many countries better than 70 percent of adults have mobile phone subscriptions. This means that even for people living on less than $2 per day, the volume of transactions makes mobile a winner for banks in developing countries. Again from the Gates’s annual letter: “By making small commissions on millions and millions of transactions, mobile money providers can make a profit serving poor customers, just as brick-and-mortar banks do serving the wealthy. Once these services get going, then there will be competitive innovation in offerings like special savings or credit plans related to farming or education.” A working business model backed by the world’s biggest philanthropists sounds good enough to take to the bank.

One comment

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The only problem, Bill and Melinda, is that in order for people to be able to use their mobile phones for payment processing, they must have actual money to spend. We live in a world where people have no jobs, no income and no disposable income to load their phones with. You should probably be putting together strategies to destroy the criminal banking institutions that destroy people’s lives rather than playing with ideas that cannot be used by a large percentage of the population.

Posted by johnlocke445 | Report as abusive