Mobile banking: innovation for the poor

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 (Gu, Lee & Suh, 2009). This research examines the factors influencing the adoption of mobile banking by the Base of the Pyramid (BOP) in South Africa, with a special focus on trust, cost and risk including the facets of risks: performance risk, security/privacy risk, time risk, social risk and financial risk. The research model includes the original variables of extended technology acceptance model (TAM2) (Venkatesh & Davis, 2000). 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 perceived 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.