There’s an app for that: Mobile banking as a tool for A2J

By Laurent Arribe

Mobile banking has become all the rage. Over 110 money mobile systems have been created across the globe with more than 40 million users. Ever since the technology’s introduction in the mid-2000s, its take-up rate has soared as lower income populations gained access to a banking savings system.

The expected benefits from mobile distribution and banking include lower costs and greater privacy. Especially in resource poor settings, low transaction amounts for informal money transfer were over 30 percent less expensive than informal money transfer options. They also drastically increased savings rates and even reduced the risks robbing. As apparent benefits accrued, development practitioners took notice and new applications began taking place.

Today, mobile banking is used in cash transfer programs and evidence of the technology’s impact on recipients and implementing agencies is beginning to appear. As one would suspect, by using this method for cash transfer programs, implementers can significantly improve their cost-effectiveness. However there are also additional surprising benefits such as improved dietary diversity, diversification of consumer goods, and growth in marginal cash crops. These hold tremendous promise for conditional cash transfer programs looking to generate behavioral change. The reliability, speed, and low-cost of mobile cash transfers make it a versatile tool for many projects working in appropriate contexts. And while future challenges will surely arise, especially in regards to security, regulation and taxation, this technology will continue to profoundly change the lives of people across the world.

Extrapolating this success to the ICT4D field, I anticipate further progress in the creative uses of existing technologies when applied to constrained resource settings. While those who have grown accustomed to a certain level of practicality and materialism have trouble imagining what it must be like to live with $1.25/day, it cannot be assumed that people who do should settle with less. Whether it be in the finance sector, or health, agriculture, education, or just plain fun (they’re entitled to enjoying life too – thanks again for the link Crysta!), mobile phones undoubtedly hold enormous potential for allowing people to make the most with what they have. People will continue to maximize their benefits and technologies such as mobile will only serve as a platform for further creativity to serve their everyday lives.

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