Its about time cell phone banking came to the US.
Before banks like Bank of America, Wachovia and Citibank jumped on recent cell phone banking trends all we had was PayPal. And, PayPal isn’t even a bank. They just offer cell phone activated money transfers.
Cell phone banking is nothing new for countries like South Korea, Japan and the Philippines. They have had it for years. In the developing world, specifically South Africa, cell phone banking is also nothing new. Online banks like Wizzit and MTN Banking have been offering South Africans cell phone banking for some time now.
In South Africa, cell phone banking has actually caught on with low-income users. The low income users even helped build buzz around cell phone banking when they started trading prepaid mobile minutes (here is an interesting post on prepaid minute swapping GigaOm made a couple of days ago).
I think cell phone banking will serve as a powerful tool to microfinance lenders as they scale up their operations. The reason microfinance institutions keep such high interest rates, usually around 24% effective, is because of loan processing and dispersal. Cell phone banking transactions could prove to drastically reduce loan processing and dispersal costs.
More info:
• Bank of America mobile banking
• AT&T partners with banks to offer mobile banking
• Citibank mobile banking
