14 November 2006
Just over one in 10 South Africans with bank accounts have used their cellphones for banking, according to a new study on cellphone banking by technology research firm World Wide Worx.
The study, part of a year-long “Mobility 2006” research project funded by First National Bank, Virgin Mobile and Verizon Business, was released on Tuesday.
Youth market lags
One of the big surprises from the research is that South Africa’s youth market, which is usually assumed to be at the cutting edge of all things technology, is the least likely to have tried cellphone banking.
The opposite is true: usage of cellphone banking tends to increase with age. In fact, almost a quarter of South Africans with bank accounts who are aged from 46 to 55 have used their cellphones for banking, versus less than 10% in the youth and young adult markets.
According to the study, 87% of South Africans who have tried cellphone banking have used it to access balances, with the next most common usage being purchasing airtime through the cellphone.
A quarter of SA cellphone bankers have used their handsets to pay accounts, while 17% have made once-off payments from their cellphones.
“It is clear that mobile commerce is happening, but only for very specific activities,” World Wide Worx MD Arthur Goldstuck said in a statement.
Once the costs come down …
“There is a strong relationship between the need for banking access and likelihood of using it. And once the costs of cellphone usage comes down, we will see a rapid increase in uptake.”
The research is supported by the experience of First National Bank, which was the first bank to introduce banking via SMS in 2005.
“Cellphone banking is taking off right now because we are giving people what they need, rather than focusing on what technology can do,” said Len Pienaar, CEO of FNB Mobile and Transact Solutions.
“While many users do not yet feel comfortable with transactions, it is clear that there is a great need for information about their accounts and the purchases of pre-paid products, and a growing need for paying accounts without having to go to a bank.
“Once more users are ready to transact via their cellphones, we will be ready for them.”
Higher demand in rural areas
World Wide Worx also found that demand in South Africa’s rural areas was often far higher than in urban areas, supporting last year’s finding, from Mobility 2005, that need for access was a far more important determinant of cellphone banking than being “switched on” to the possibilities of technology.
According to Mobility 2006, the issue of high perceived cost remains the largest inhibitor for people who would consider using their cellphones for transactions, with 44% saying lower cost of transactions would convince them.
“Nearly a third are held back by the apparent difficulty of using cellphone banking, while security is a concern for 29% of people who might be encouraged to become users if they were given guarantees,” World Wide Worx said in a statement.
“Nearly a quarter of people feel that nothing would convince them to use cellphone banking for purchases!”
According to Pienaar, awareness and education are also factors. “In the next few years, as cellphones become a standard way of doing your banking, people will wonder how they ever managed without it,” he predicts.