Only slightly more than one out of 10 South Africans with bank accounts have used their cellphones for banking, according to research released by World Wide Worx on Tuesday.
A surprising finding from the research is that the youth market, which is usually assumed to be up to date with the latest technology, is the least likely to have tried cellphone banking.
In fact, the opposite is true, said World Wide Worx, an internet and IT research company — usage of cellphone banking tends to increase with age. Almost a quarter of South Africans with bank accounts who are aged between 46 and 55 have used their cellphones for banking, compared with less than 10% in the youth and young adult markets.
The research, which formed part of the year-long Mobility 2006 research project, was funded by First National Bank, Virgin Mobile and Verizon Business. It was found that 87% of those who have tried cellphone banking used it to access balances.
The next most common usage is purchasing airtime via a cellphone, and while a quarter of cellphone bankers have used their handsets to pay accounts, only 17% of cellphone banking users have made one-off payments from their cellphones.
“It is clear that mobile commerce is happening, but only for very specific activities,” said Arthur Goldstuck, MD of World Wide Worx. “There is a strong relationship between the need for banking access and likelihood of using it. And once the costs of cellphone usage come down, we will see a rapid increase in uptake.”
The research is supported by the experience of First National Bank, which was the first bank to introduce banking via SMS in 2005.
“Cellphone banking is taking off right now because we are giving people what they need, rather than focusing on what technology can do,” said Len Pienaar, CEO of FNB Mobile and Transact Solutions.
“While many users do not yet feel comfortable with transactions, it is clear that there is a great need for information about their accounts and the purchases of prepaid products, and a growing need for paying accounts without having to go to a bank. Once more users are ready to transact via their cellphones, we will be ready for them.”
World Wide Worx found that demand in rural areas was often far higher than in urban areas, supporting last year’s finding, from Mobility 2005, that need for access was a far more important determinant of cellphone banking than being switched on to the possibilities of technology.
The North West (17,5%), Mpumalanga (14%) and Free State (13,3%) were the regions found to have the highest proportions of cellphone bankers. This did not apply across the board, however, as Eastern Cape and Limpopo shared with the Western Cape the lowest incidence of cellphone banking.
The issue of high perceived cost remained the largest inhibitor for people who would consider using their cellphones for transactions, with 44% saying lower cost of transactions would convince them. Nearly a third were held back by the apparent difficulty of using cellphone banking.
Security was also a concern for 29% of people who might be encouraged to become users if they were given guarantees. Nearly a quarter of respondents felt that nothing would convince them to use cellphone banking for purchases.
“This is also a factor of awareness and education,” said Pienaar. “In the next few years, as cellphones become a standard way of doing your banking, people will wonder how they ever managed without it.”