Here’s an interesting mobile banking comparison done by Amin Mohseni-Cheraghlou at the World Bank between two countries that couldn’t be any more opposite in their use of mobile banking or their economic development.
A survey conducted by MasterIndex shows that about 50 percent of Russians are skeptical towards debit and credit cards, even if they own one. Therefore, more than 83 percent of the 140 million-plus active bank cards are payroll cards and more than 90 percent of activities registered on these cards are ATM withdrawals on paydays.1 Preferring cash to electronic and mobile forms of payment may also be rooted in Russians’ distrust in 1) the technology’s secureness against financial fraud and identity theft, and 2) government’s ability and motives in tracking their financial transactions.
With more than $1 billion USD in value per year (more than 70 percent of Somali GDP), remittances have been the backbone of the war-torn economy. Without ZAAD mobile phone payment service, the effect of these remittances would be minimal. ZAAD has made it possible for remittances to be transferred across the country with a push of a button and with no risk for the sender or receiver, making it possible for thousands of people across Somalia to gain access to basic food items and healthcare.5
Mobile banking is the perfect, custom tailored weapon for solving the financial inclusion dilemma for the world’s poor.
Therefore, alongside technological and regulatory requirements, countries that are contemplating the possibilities and potentials of mobile banking in their economies need to be mindful and pay closer attention to the specific local conditions and cultures that could hinder or promote the advancement of mobile banking in their economies.
Uganda, are you listening?