Mobile money benefits the world’s poorest more than it does the affluent. M-PESA and M-Shwari in Kenya are proving that participation in a nation’s economy through mobile could help to pull individuals out of poverty if they managed their money wisely. For people in remote areas with high poverty rates, a trip to the bank is a lot more than a 20 minute drive, and a 5% fee can be ruinous.
It doesn’t take much of a stretch to consider that developing countries, many of which have evolved into a mobile-first cultural mindset, implicitly trust their phones more than those in countries that use phones as a second or third device.
Still, the digital and mobile-first banking space is heating up nationally and internationally. Number26 is a mobile-first bank that is starting to spread throughout Europe, announcing expansion from Germany and Austria into six new countries today: France, Italy, Greece, Ireland, Slovakia and Spain. It’s the first of its kind to go international.
Companies like One Financial in the U.S. are building a mobile-first banking experience specifically targeted to the nation’s poor, many of whom have to rely on payday loan-type companies with ruinous interest rates for their monetary transactions.
These digital banking solutions are nearly devoid of fees compared to some traditional banks, and are focused on innovative practices that other banks are not incentivized to develop, like depositing and withdrawing cash in grocery stores.
Mobile banking is a service that appears to trickle upwards on the economic scale, and that’s probably a good thing. Those with trustworthy credit unions or banks probably won’t see much of an advantage to switch until the benefits of mobile far outweigh a consumer’s entrenched habits.