Cellphone banking for the masses

A little more than a year ago cellphone banking was a fad for those who could tell the difference between WAP, WIG and USSD.

Now on the brink of mass market uptake, cellphone banking is expected to bring in R650-million in transactions over December for the big four banks.

“Cellphone banking has moved from a fad to a niche service. The challenge now is to get mainstream adoption,” says Len Pienaar, CEO of FNB’s mobile and transact solutions. He was speaking at the launch of the results of a survey by researchers World Wide Worx.

Cellphone banking started off pushing cost savings for banks by getting people out of queues, but has “moved from cost saving to big transaction generator”, he says.
“In December we hope to have 100 000 customers doing one or more transactions. We hope to break R100-million in transactions.”

Standard Bank hopes to see the same amount, while Absa expects R400-million and Nedbank wants R50-million in transactions.

“These stats show us that cellphones are almost a democratising technology,” says World Wide Worx MD Arthur Goldstuck. “Whereas other wireless technology appears to widen the digital divide, cellphones narrow it down.”

Cellphone banking is used by 10% of all mobile users with bank accounts, the survey found. “Even though FNB has a higher proportion of users, the size of Absa ensures that it has the highest share of users in mobile banking (39%). FNB follows closely at 36%, Standard Bank has 17% and Nedbank 6%,” the report found.

Balance enquiries are by far the most frequently used services (87,8%), followed by airtime purchases (40,2%), mini statements (36,6%), transfers (35,4%) and account payments (25,6%).

One of the most interesting players in the market is Wizzit, which offers only cellphone banking and operates as a division of the Bank of Athens.

“There is no doubt that cellphone banking is here to stay and it will be the next major revolution in the payments industry,” says Wizzit MD Brian Richardson.

“Some experts [Gallup International and Boston Consulting Group] estimate that payments originating from a cellphone will touch the $4,2-trillion level per annum over the next few years. When we launched, the more traditional banks did not believe that cellphone banking would work — today all the banks have a cellphone banking channel.”

Part of the success of this method of banking is attributed to the use of a technology that looks like SMS and is menu-driven, so there is no fear of users misspelling instructions.

Called USSD (Unstructured Supplementary Service Data), it requires a direct connection between the phone and the bank’s servers. Messages are sent to a phone asking for a response, which users select from a menu — such as withdrawals or transfers, from which account, how much, and then to confirm them.

Along with SMS-based banking, there are two other methods, known as Wireless Application Protocol (WAP) and Wireless Internet Gateway (WIG).

WAP is a way to connect to slimmed-down internet pages using your cellphone, which are especially designed for mobiles and usually feature only text and may have very small graphics.

WIG is an application that is stored on a SIM card, which must be a higher-capacity 32K or USIM card, and offers a menu-based system for transactions.

The barriers to adoption, says researcher Peter Searll, are high perceived costs and a reticence to try something users don’t know or understand.

But once consumers have tried it, they tend to experience attitude shifts and are won over by the ease of use of cellphone banking.

Balance enquires for the bottom of the market can be turned from a trip on a taxi and a long queue in a bank into a three-second transaction that costs 50c.

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