Issue: 2012 July - August
Mobile Banking: Can the Unbanked Bank on It?
Unbanked and underbanked Americans pay a high price for not being banked, often relying on income-draining payday loans, refund anticipation checks, and check cashiers to conduct financial business. No bank account also means no savings and no credit—and no asset building. Mobile banking could change all that. One needs only to look to South Africa and Kenya for successful mobile-banking models. Virtual banking in South Africa and telco banking in Kenya have enabled millions of previously unbanked people to set up bank accounts, pay bills, and make purchases, all through their mobile phones. Adaptation of these models could set the unbanked and underbanked on the path to economic mobility and financial stability.