Mobile banking launches in five African countries

Tom Burgis reports in today's Financial Times:

Africa's biggest mobile phone operator yesterday launched what it hopes will become the world's largest mobile banking service,

MTN's new scheme, which follows the success of a similar Kenyan venture by Vodafone of the UK and local operator Safaricom, accelerates the provision of basic financial services to people long considered "unbankable". It uses the popularity of mobile phones to offset the absence of bank branches.

Subscribers in an initial five countries - Uganda, Ghana, Cameroon, Nigeria and Ivory Coast - will be able to deposit, transfer and withdraw funds on handsets.

The Johannesburg-based group is using software from Fundamo, the world's largest specialist mobile financial services company, in a deal worth $10m.

In a sign of the potential obstacles mobile companies face as they seek to wrest some banking services from financial institutions, MTN has also entered partnerships with local banks in each territory in order to meet central banks' requirements.

It will generate revenue by charging transaction fees.

MTN is also running pilots in other countries.