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FNB says mobile wallets are slowly killing the leather walletBy Staff Writer 16 May 2011 | Categories: news
First National Bank (FNB) has announced that the transfer of money via mobile phones is experiencing rapid growth in South Africa, with 18% of South Africans employing this service.
According to 2011 World Wide Worx research, which probed the use of mobile phones for banking purposes, almost two out of every ten South Africans are now using their phones to transfer cash to their family, friends and business associates.
“Mobile money is one of the fastest growing sectors in the financial services environment – with many people opting for an electronic wallet instead of a leather one,” said Yolande van Wyk CEO of First National Bank (FNB) eWallet Solutions.
Location, location, location
Within six months the number of eWallet holders has doubled, from 250 000 in October 2010 to more than 500 000 in April 2011. Figures released by FNB indicate that the majority of users of this service (79%) are younger than 40. Users are also located mostly within Gauteng (40%), followed by KwaZulu-Natal (14%) and the Eastern Cape (12%).
“We’ve been tracking the eWallet withdrawal footprint across the country and it is interesting to note that we’ve even seen eWallet ATM withdrawals in small towns such as Modjadjiskloof in Limpopo, and Ngcobo in the Eastern Cape,” stated Van Wyk.
She added that because there are at least 35 million local cellphone users and the fact that you can reach a mobile user practically anywhere in the country, mobile money transfer services have become the most convenient way of sending money.
More benefits of the eWallet
According to Van Wyk the appeal of mobile wallets doesn’t only lie in a user’s ability to send money to anyone, anywhere, but also in its ease of use as well as the instant availability of the funds for the recipient.
Independent research by FNB shows that 68% of eWallet users use the service to send money to people who are financially dependent on them and 64 % of these people send money to relatives who reside in a different province. In such cases, money is often required urgently, so the instant nature of the eWallet service makes it highly suitable.
Futhermore, the eWallet is not merely a money transfer tool, as it can also be employed to purchase prepaid airtime as well as electricity via the mobile phones.
Reaching the unbanked population
Another benefit of the eWallet is that it can become a gateway to providing formal banking services to the unbanked segment of the population. “More than 13 million adults in South Africa still remain unbanked with the biggest percentage of these adults based in remote or rural towns,” said Van Wyk.
“These latest trends show how the banked population is beginning to play a significant role in introducing the unbanked to some form of banking, like cash withdrawal from ATMs, and we want to use such information to help extend formal reach of banking to the unbanked population and eventually introduce them to mainstream banking through these channels,” she concluded.
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