Blowin’ in the wind

Dave sends me this link to a New York Times article dated 24th May – Bob Dylan’s birthday, a man whose songs seem strangely forgotten today – written by John R. Quain, its titled "Cellphone banking is coming of age".

While tempted to do nothing more than roll about the floor laughing snarkily, my mature side quickly asserts itself and directs me towards a more measured and thoughtful response. Taking a deep breath, I plunge in to read this exciting news, that mobile banking has finally been noticed by that bastion of mainstream media, the New York Times herself. Oh happy happy joy joy.

Hmm a quick skim of the article feels vaguely familiar in its framework – beginning with a couple of scenarios to set the contextual stage, the author plunges into a discussion of the progress of cellphone banking in the United States. I could be wrong but it all feels oh so familiar. Back to the important bits, both Citibank and Bank of America have JUST in the past couple of weeks, launched mobile banking through the cellphone for their customers. While BoA just lets you surf right on in, Citi requires that you download a special banking application software onto your phone. To wit,

But before your cellphone turns into your wallet, free mobile banking
has to overcome one significant hurdle: the cost. While banks may not
charge for making transactions on a phone, cell carriers do. Wireless
carriers continue to charge cell customers by the kilobyte of data
used. It’s an inscrutable system for users — how many kilobytes was
that Web page? — that can lead to exorbitant charges. For example,
checking my balances, making a transfer and confirming a few payments
totaled 244 kilobytes, plus one text message, on Citi Mobile. Total
charges from AT&T: $2.59. So, if someone used mobile banking as
freely as dropping by the local A.T.M., it could get costly.

Er, no… ATM’s charge upto $1.99 and your bank charges another couple of bucks if its not their ATM – that’s paying around $3.50 to $4.00 for a $20 withdrawal. In Shakespeare’s day, it was called usury. However, I digress, wouldn’t a simpler text based system as prototyped successfully elsewhere be faster and cheaper to use? The BoA method certainly sounds that way. Quoting Mr Quain again,

To make account information legible on a phone’s diminutive screen,
Bank of America decided to use the wireless application protocol, or
WAP, approach. Essentially, it’s a poor man’s Web format, eliminating
superfluous graphics in favor of text that can be more easily
transmitted and displayed.

Bank of America’s approach means that
practically any cellphone with Web access — nearly 85 percent of all
mobile handsets, according to the company — can use the service. It
does not matter what carrier customers use. Furthermore, users do not
have to go through the awkward step of downloading a special software
program to their phones to use online banking.

Seems Bank of America might be onto something there, but how soon before it, too, is forced into unilateral agreements with service providers and telco’s? This is not coming of age by any means. Mr Quain perhaps must needs visit the Wizzit office or mPesa’s to see how these same services are being offered to the unbanked and the underserved.

The methods described above sound like a luxury – the need for extra data service signups, feature rich phones that allow you multimedia access and what not. While they will certainly offer one MORE means for your average wealthy highly productive highly developed industrialized nation’s denizen to check his account balance and overdraft facilities, they certainly won’t address the challenge that mobile banking has the potential to overcome – banking the unbanked, thus releasing the flow of wealth and assisting with the social and economic development. And this is something that no society can afford to overlook.

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