Mobile banking and economic development: Linking adoption, impact, and use – by Jonathan Donner, Microsoft Research India and Camilo Andres Tellez, London School of Economics and Political Science. It was published this December in the Asian Journal of Communication.
In the following a short summary of the paper:
The paper is about research of the usage of m-banking and m-payment systems which are used by people without access to traditional banks. Specifically, small enterprises in urban India are observed.
Across the developing world, there are probably more people with mobile phones than with bank accounts. In countries like The Phillipines or Kenya services which provide banking services via mobile phone are very popular.
In the developing world, m-banking/m-payment applications are appreciated by the customers as well as the companies. Customers are happy that they get an affordable possibility to transfer money without handling cash, mobile phone companies see it as an easy service to offer and strengthen the bond to the customer, banks have identified it as a convenient method of “branchless banking”.
Most systems offer three services:
- Store value in an account via a handset
- Convert cash in and out of the stored value account
- Transfer value between accounts
To date there is only few research on adoption and usage of m-banking/m-payment systems, especially the contextual factors have not been studied so far.
Three examples for important contextual factors:
- Conceptualizing Electronic Money:
interface to handle account services has to be easy and understandable
“invisible money” has to be represented in an appropriate way
- Existing Payment Mechanisms
existing mechanisms and their functioning have to be kept in mind
- The Social Embeddedness of Economic Transactions
differences to whom the money is given
woman empowerment through greater indepence?
When m-banking/m-payment is studied, there are doubtlessly many parallels to other ICTs. Considering it generally as an ICT4D, there are three cross-cutting themes which characterize the social structures underlying the usage of technology:
- Bi-directionality of influence between communication technologies and the social structures in which they exist
- Amplification and altering of existing social structures
- Introduction of trust in the technology, in people, in own skills, …
Own study in urban India:
Despite the IT boom in India, most enterprises are still traditional, small and informal – without bank accounts. This study explores, how m-banking/m-payment systems might be used there. Business owners from Bangalore were interviewed for that purpose.
Three types of approaches were identified:
- Relational businesses:
no need for complex ICTs
desire for mobile phone, but problems with affodability
- Locational businesses:
special relations to people in their business network
- Formal enterprises:
active users of ICTs
Usage of ICTs has different motivations:
- Getting new customers
- Keeping better in contact with present customers
issues with trust and user capabilities
19 of 20 enterprises will for now stick to the face to face model for credits
- Cost-savings are an important reason for using ICTs nowadys
More research concerning the conventions of using ICTs would be useful
- This could explain the current usage of some services
- the impact of providing the “unbanked” with a bank account have to be studies more closely
- The emergence of m-banking/m-payment has implications for the whole social and economic sphere
the borders between domestic/productive and social/transactional spheres are blurred
both, social and economic spheres should be considered in further research
“the true measure of that importance [of m-banking/m-payment] will require multiple studies using multiple methodologies and multiple theoretical perspectives before our questions about adoption and impact will be answered [from the article]”
For the whole article I may refer here.