Mobile banking refers to financial transactions conducted over a mobile device. Mobile banking has the potential to reach more people, at a lower cost, and with increased convenience than traditional “brick and mortar” banking services.
With the rapid global expansion of mobile technology, mobile banking is helping vast numbers of previously excluded people access financial services. Mobile network operators, governments, and financial institutions, ranging from large commercial banks to microfinance institutions, recognize and have begun to leverage the potential of mobile banking. A number of governments and their central banks have also embarked on “cash-lite” policies to reduce the use, and therefore cost, of cash in their economies.
Mobile banking models are being tested with varying degrees of success around the world. Safaricom's M-PESA in Kenya is probably the best known and most successful example of mobile banking. Its vast success sparked a wave of start-ups and partnerships that use the service to provide Kenyans other valuable services, such as utility payments, savings accounts, and microinsurance.
Researchers are studying successes and failures of mobile banking to understand the market forces, business models, and ecosystem requirements to support successful mobile banking deployments elsewhere around the world.