South Africa observes high mobile banking usage

Cellphone banking has increased in the past year, as South African consumers gain confidence in their handheld devices as a tool for both communications and efficiency.

According to research, among urban cellphone users, 44% now use cellphone banking services, compared to 27% a year earlier. In smaller centres and towns, 27% now use cellphone banking, suggesting that rural areas lag urban users by about a year in take-up of these services. In total, 37% of South Africans in urban and rural areas aged 16 and above now use cellphone banking.

As per sources, predominant customer base resides within the mainstream market: 65% of 2.6 million banking customer base earns less than US$13,721 per annum and are between the ages of 18 – 40 years old. Cellphone Banking is becoming the preferred alternative as people across the board are driven by the ‘anywhere, anytime’ concept of banking.

Usage of cellphone banking peaks in the 26-34 age group, at 41%, and drops to 11% in the over-45 group. Male usage far outpaces that of females, at 56% against 44%. While education is a factor in usage of cellphone banking, with 43% of cellphone banking users having matric, and 38% with post-matric qualifications, the biggest proportion of cellphone banking users – no less than 27% – earn less than a US$137.21 a month.

The vast majority of cellphone banking customers still use the basic services, such as balance enquiries (78%) and notifications (58%).

However, transactional services are for the first time major components of cellphone banking services, with half of respondents buying airtime, 24% paying accounts, and 17% transferring funds between accounts. Emerging Mobile commerce transactions such as purchases and sending money to another persons’ cellphone are also appearing on the radar screen for the first time. 12% of cellphone banking users also send money to other individuals, and 11% making a purchase via their cellphone.

For most of these services, urban respondents are far more likely to have made use of them, except in the case of sending airtime to someone: 33% of rural users of cellphone banking have done so, versus 22% of urban users.