The market for mobile financial services in emerging markets is on track to surge from zero to $5 billion by 2012, according to a study conducted by the U.S.-based microfinance policy and research center CGAP and the GSMA, a wireless trade association.
While people in emerging markets have used cellphones for some time to conduct business, it’s been fairly disorganized. There’s well known stories of people trading wireless voice minutes to pay for food or other services. Now it appears that there’s a more organized way of mobile banking coming to emerging markets, like Kenya and other African countries. Yahoo Tech News reports that in Africa only one in five people have bank accounts, mainly because its pricey to have branches in areas where people live off a few dollars a day. But in emerging markets overall, the number of people that have a cellphone is already reaching about 1 billion.
By the end of this year, CGAP expects more than 120 mobile money implementations in developing markets. The report, which will be released next week at the Mobile Money Summit in Barcelona, also says operators have incentive to roll-out banking services because in addition to an uptick in revenues — about $1.10 in average revenue per user — they could save up to $2 billion lowering churn.
Photo Credit: Flickr