Time for a New Kind of Bank in SA?
eWallets and mobile banking is the way forward, or so FinTech experts will have us believe. So are we ready?
Published: Monday, August 1st 2016
When M-PESA flopped a few months ago, Vodacom explained that there simply wasn’t the demand. This was owing to nearly 70 per cent of South Africans being in the formal banking sector. A sector which is renowned for being world class.
Despite these protestations, mobile payments are on an upward trajectory in South Africa. This leaves one to ponder the true reason for the failure.
Consider the success of SnapScan. It has been adopted quickly by consumers in the higher income brackets. (An app that works on any smartphone but remains synced to your banking details).
Request an easy Income Protection quote here
M-PESA is a roaring success in Kenya, but flopped in South Africa.
The development of mobile banking in South Africa
Both Standard Bank and First National Bank are branching out into Fintech both locally and up in the rest of Africa.
For example, Standard Bank has developed SlydePay within Ghana to extend ease of payments to the rest of the continent. And FNB launched their e-Wallet two years ago.
When you consider that cellphone ownership is no longer prohibitive in Africa, little is left to the imagination. In fact, there is over 90% cellphone ownership in South Africa (with some people owning more than one), and smartphone penetration is around 40%. Mobile wallets are also not hampered by the same kind of logistical demands as banks.
Furthermore, according to Paypal Africa general manager, Efi Dahan, people shopping with their phones tend to spend more money than people shopping online on their laptops or tablets. The reason? Simply that their phone is with them at all times.
And mobile shopping is only going to be on the rise in Africa as Amazon and other Ecommerce giants blossom.
Therefore, virtual mobile accounts (mobile wallets which require a bank’s backing) are a realistic goal for banking expansion plans across Africa.
Are banking queues and high fees part of our future?
We must not neglect the 30 per cent of South Africans who do not have a bank account. And then there are countless other African immigrants flying under the radar. They receive their wages in cash and then carry them home to literally hide under the mattress in crime-ridden informal settlements.
Furthermore, all levels of society already air disapproval of high banking fees and slow service. Simply put, there may already be a gaping gap in the market waiting for the next disruptor.
Therefore, one question remains. Namely, who will take the M-PESA idea and model it in a way that appeals to the lower-end markets in South Africa? Could Jumo or Bitcoin be the answer?
Or is there another ‘fin-Uber’ waiting in the wings?