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Mobile banking: Innovation for the poor

Author

Listed:
  • Ismail, Tashmia

    () (Gordon School of Business Science, University of Pretoria, and UNU-MERIT)

  • Masinge, Khumbula

    () (Gordon School of Business Science, University of Pretoria)

Abstract

Access to, and the cost of, mainstream financial services act as a barrier to financial inclusion for many in the developing world. The convergence of banking services with mobile technologies means however that users are able to conduct banking services at any place and at any time through mobile banking thus overcoming the challenges to the distribution and use of banking services. This research examines the factors influencing the adoption of mobile banking by people at the Base of the Pyramid (BOP) in South Africa, with a special focus on trust, cost and risk. Data for this study was collected through paper questionnaires in townships around Gauteng. This research has found that customers in the BOP will consider adopting mobile banking as long as it is perceived to be useful and to be easy to use. But the most critical factor for the customer is cost; the service should be affordable. Furthermore, the mobile banking service providers, both the banks and mobile network providers, should be trusted. Trust was found to be significantly negatively correlated to perceived risk. Trust therefore plays a role in risk mitigation and in enhancing customer loyalty.

Suggested Citation

  • Ismail, Tashmia & Masinge, Khumbula, 2011. "Mobile banking: Innovation for the poor," MERIT Working Papers 074, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2011074
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    File URL: https://www.merit.unu.edu/publications/wppdf/2011/wp2011-074.pdf
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    More about this item

    Keywords

    Bottom of the pyramid; financial services; mobile technologies;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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