Firms eyeing the mobile payment market need to have incentives to try out new solutions and to invest in distribution networks. If they can expect that, once successful, they will be forced to share their success with others without being sure that they are adequately compensated for their investment as well as the risks they incurred then they might be unwilling to invest in the first place. Moreover, mobile technology is evolving very fast by any historical standard. More likely than not, a few years from now, new superior competing solutions will be found and compete with the early movers like M-PESA. Successful early entrants may obtain high returns for a few years, but that may be necessary to compensate them both for the original risk they took and the fact that they bet on a solution that will be outmoded just a few years later. The core tool of competition policy for mobile money systems is entry by new competi- tors. What is clearly counterproductive is legal barriers to new entry, for example, in the form of exclusivity periods for incumbent providers. Free entry provides the strongest incentives to develop new business models if entrants can devise their own pricing structures.
DOI: 10.4236/ajibm.2019.96092 1414 American Journal of Industrial and Business Management paper attempted to examine the contributions of information and communica- tion technology towards achieving financialinclusion and reducing financial ex- clusion in the country and analyzed different application of information and communication technology which banks are adopting. The study posit that this would directly or indirectly reflect the effectiveness of the financial institution’s efforts to bring-in underprivileged people to the mainstream financial system, especially in rural area support in achieving inclusive growth. The study con- cluded that modern information and communication technology can act as a tool to develop a platform which helps to extend financial services to remote areas. The study specifically identifies mobilebanking and automated teller ma- chines as two promising options for achieving financialinclusion. Thus, the technology of mobilebanking and automated teller machines are adding new avenues in providing banking services to the unbanked population who are fi- nancially excluded. However, the study is qualitative and relied on previous em- pirical findings and conclusions which makes it prone to bias and subjectivity.
Firms eyeing the mobile payment market need to have incentives to try out new solutions and to invest in distribution networks. If they can expect that, once successful, they will be forced to share their success with others without being sure that they are adequately compensated for their investment as well as the risks they incurred then they might be unwilling to invest in the first place. Moreover, mobile technology is evolving very fast by any historical standard. More likely than not, a few years from now, new superior competing solutions will be found and compete with the early movers like M-PESA. Successful early entrants may obtain high returns for a few years, but that may be necessary to compensate them both for the original risk they took and the fact that they bet on a solution that will be outmoded just a few years later. The core tool of competition policy for mobile money systems is entry by new competitors. What is clearly counterproductive is legal barriers to new entry, for example, in the form of exclusivity periods for incumbent providers. Free entry provides the strongest incentives to develop new business models if entrants can devise their own pricing structures.
In Asia’s financialinclusion has lifted millions out of poverty although there is deteriorating income inequality in recent years. Financialinclusion is critical as it increasing the poor’s access to financial services and hence an effective tool to help reduce poverty and lower income inequality through increase asses to credit (loans) and cost effective services. Over decades, financial intermediation has been undergoing a transformation, owing to changes in the global financial system. The banking system has evolved through major financial innovations in the past decade promoting financialinclusion. This has been through globalization of financial systems, deregulation, and great advances in technologies. The financial systems has facing higher volatilities, more competition and wide varieties of risks and therefore financial innovation has become an important tool to provide new products and strategies to better suit different circumstances of time, market and to meet different requirements of participants in financial system. Without expanding inclusion to financial services, there will be a problem on quality access and affordable, appropriate and sustainable financial services and products to majority of the population. This will increase their access and usage of financial markets and hence encourage savings/investments and allow capital/asset accumulation. Safe havens for savings by the poor reduces their vulnerability to periodic economic and social shocks and enhances their infrastructural facilities, technological innovation, institutional developments, natural features, as well as financial system policy and regulatory reforms, increased competition and innovations in the financial market. These developments have set off a dramatic shift away from the traditional delivery of financial services, innovations such as Automatic Teller Machines (ATMs), Point-of-Sale (POS) devices, the internet and mobile phone platforms and its interlinkages with financial institutions platforms have accelerated and moved us closer to branchless banking. However, still have some ground to cover in expanding access to financial services, given that about 25% of the population remains totally excluded.
emerging research literature on m-banking. It presents a classification framework for m-banking research based on 65 m-banking papers published between 2000 and mid-2010 in Information Systems (IS), technology innovation, management, and marketing journals, and major IS conferences. These papers are classified into five main categories: m- banking overview and conceptual issues, Features & Benefits of MobileBanking, Current operating practices of commercial banks, Mobilebanking/payment practices in Indian Commercial Banks and Challenges in India strategic, legal and ethical issues. It is expected that the comprehensive list of references and assessments presented in this paper will provide a useful anatomy of young m- banking literature to anyone who is interested in m- banking and help stimulate further interest.
Mobilebanking provides a ray of hope for the unbanked. The rapid uptake has systematically ensured that the critical mass required as a threshold for sustainable expansion is reached. With the potential outburst of M- banking showing signs of reaching the wider population segment, the mobilebanking divide (gap between those with access and those without enhanced banking services) can be expected to gradually diminish. Sustained introduction of new mobile based banking services, tend to complement existing services thus those without access to the original services are actually thrust into a further distance from access. Cost of phones and services also remains a significant drawback. The fact that a vast proportion of the population still relies on pay phones is an indicator of the financial challenges faced by many potential users of the new banking system. The distribution of mobile phones and consequently ability of service use can also be regarded as inequitable. More men have phones than women, thereby indicating a dominance of ownership and consequently the access. Barriers Potential barriers to the success of mobile wallets include: Limitation in the devices for which wallets are available Uncertainty regarding future technological developments Lack of legal clarity possible increase in costs for retailers
Modernisation Theory was used to present the developmental perspective on m- banking, it painted a rosy picture of its cause and effect, but neglected the more complex processes related to technological growth in developing economies. Although the socio- technical perspective ratified that the technology transfer and diffusion process cannot be black-boxed and applied from the west to the rest, modernisation theorists argued that m-banking outcomes for change were contingent on events and practices, so hence, were not replicable in other countries (Morawczynski, 2011). Perhaps, these outcomes may prove fruitful for development practitioners, who precisely, set their expectations on particular types of impacts related to technological interventions in communities. However, I argue that the theory failed to account for the side-effects, or contingencies, arising from the context itself within which local ICT innovation occurs in developing countries. This argument may be relevant in this study as well, in viewing m-banking innovation as an indigenous process amidst the interplay between diverse external and internal contextual factors that may interfere with local developmental objectives. Drawing upon the IS literature, the Technology Acceptance Model (TAM) was applied to explore the critical factors that affected m-banking adoption for users. As authors have rightly criticised, the model was rather universally applied in an ad-hoc manner in previous studies (Duncombe and Boateng, 2009). Moreover, it failed to relate m-banking construction with adoption and usage and neglected user’s role in the shaping of technology. Hence, by rejecting the common belief that technology may be appropriated by users, through continued usage and interaction, TAM discounted the notion of social- embeddedness that arguably has different expectations and implications for technology designers and users. More importantly, the model overlooked how certain constraints related to m-banking adoption affected usage within diverse social and organisational contexts in developing countries.
Financial literacy is an understanding of the most basic economic concepts education needed to make saving, borrowing and investment decisions. Financial Literacy is the base and primary step for financialinclusion (Education and the results). It provides knowledge on merits and demerits of financial products and services, based on that an individual can select the right product which suits his/her needs. In the words of ShriPranab Mukherjee, (during his speech by The President of India, ShriPranab Mukherjee On The Occasion Of International Literacy Day 2014) - financial literacy refers “Financial literacy and education plays a vital role in financialinclusion, inclusive growth and sustainable prosperity”. Financial Education ensures that financial services reach the weaker sections of the society. In order to improve the awareness around financial literacy, several schemes have been implemented by the Reserve Bank of India (RBI), the Security and Exchange Board of India (SEBI), Insurance Regulatory Development Authority, Pension Fund Regulatory and Development Authority (PFRADA).
Cancellation of Your FMS Service. You can cancel the FMS Service by calling 1-866-764-8638 during regular business hours. When you call us, we may also require you to put your request in writing. When you cancel the FMS Service, you will no longer be able to access any of your FMS Service features via your FMS Software. 15. Additional Terms Applicable to MobileBanking Services. MobileBanking is a personal financial information management service (“MobileBanking Services”) that allows you to access our online system and Services in a limited manner, including but not limited to, access account information, make payments to Payees you have previously established through our Services, process deposits remotely, and make transfers between your accounts that are available to you through the Services. We offer a MobileBanking Service that you can access using your mobile devices. To access our MobileBanking Service you must download the “CBNA Mobile” application from your mobile device’s application store. If you need assistance, please contact our Electronic Banking Department by emailing Corpcom@communitybankna.com, or by calling our Electronic Banking Help Desk at 1-866-764-8638 during regular business hours. You must use a compatible and supported mobile phone and/or other compatible and supported wireless device. Use of the MobileBanking Service indicates acceptance of terms and conditions set forth herein. We reserve the right to modify, change or upgrade the scope of the MobileBanking Services without notice and at any time. We reserve the right to refuse to make any transaction you request through MobileBanking. You agree and understand that MobileBanking may not always be accessible or may have limited utility. Service may be limited over some mobile networks, such as while roaming. When you register for MobileBanking, designated accounts and Payees linked to your Online Banking account will be accessible through the MobileBanking Services.
using mobile phones (Fox, 2013). Race, age, educational attainment, and household income all impacted the likelihood of individuals and households banking via a mobile platform (Fox, 2013). Non-White cellphone owners, including Hispanics, were nine percentage points more likely to use mobilebanking when compared to Whites (Fox, 2013). Almost twice as many Americans who owned a cell phone aged 18 to 29, , used mobilebanking services, versus those ages 50 to 64—54 percent and 25 percent, respectively (Fox, 2013). Among American adults who owned a cell phone, 41 percent with some college, a college degree, or higher report using mobilebanking, while only 27 percent who have attained a high school diploma or less report using mobilebanking services (Fox, 2013). Additionally, nearly forty-five percent of American cell phone-owning adults in households with an income of $50,000 or more used mobilebanking (Fox, 2013). Thus, Fox (2013) found that younger, wealthier, better educated, and minority groups tended to have higher rates of mobilebanking adoption than others.
The full sample consists 400 country-year observations (i.e., 80 countries with year observations from 2007 to 2011). The dependent variable is the country‘s cumulative index of financialinclusion (CIFI), calculated based on formula initiated by Sarma (2008, 2010). IB quantity is defined as total number of Islamic banks divided by total number of banks in the banking system. IB size is the average of natural logarithm of total assets of Islamic banks. IB profitability is the average of profit before tax (and zakat) divided by total assets of the Islamic bank. GDP is the natural logarithm of the country‘s value of GDP per capita (i.e., GDP in US dollars at market exchange rates divided by total population). Governance is an index of the average score of six governance indicators (voice and accountability, political stability, government effectiveness, regulatory quality, rule of law, control of corruption) which higher score correspond to better governance. Legal rights is an index measuring the degree to which collateral and bankruptcy laws facilitate lending, where scored on a 0–10 scale, with scores increasing with legal rights. Credit information is an index, scored on zero to six scale; scores increasing with availability of credit information. Cost contracts is total enforcement cost, including legal fees, assessment, and court fees expressed as a percentage of total debt. Banking restriction is an index capturing government‘s control, regulations, and involvement in financial sector, where higher values indicate more banking restrictions. Paved road is paved roads (in km) per square km of land area and per 1000 population. Phone is logarithm of the number of telephone (land line and mobile) subscription per 1000 population. Internet is number of internet users per 1000. Deposit interest rate is the rate paid by commercial or similar banks for demand, time or savings deposits. Lending interest rate is the bank rate
Financialinclusion becomes one of the important agendas in the international word after 2008 crisis, especially because of the crisis’ impact to those who fall under the bottom of the wealth pyramid and generally unbanked. Based on the result from a survey done by Otoritas Jasa Keuangan, Indonesia’s financialinclusion index in 2016 has reached 67.8% (Otoritas Jasa Keuangan, 2017). Though it has made the most progress across East Asia and the Pacific, the index still has to achieve the target set by Indonesia’s government, which is 75% of the total Indonesia population, in 2019. The government of Republic of Indonesia then composes a comprehensive way consisting six main strategies, called Strategi Nasional Keuangan Indonesia (SNKI) to raise the financialinclusion index in Indonesia. One of its main strategies is intermediary facilities and distribution channel of which will be the focus of this research. This research aims to find a business solution for PT Bank Negara Indonesia (Persero), Tbk., as a financial institution to expand the reach of financial institution in certain areas and to help closing the gap of financial index.
The selection and acceptance of cell phone has happened at unimaginable rate and to the most profound level of any customer level innovation ever (Jack and Suri, 2010). Three months after the official introduction of M-PESA service to the public by Safaricom, over 111,000 users had enrolled for the service. This pattern had exponentially risen to 23.4 million users as at of December 2017. Notable growth has also been seen in other mobile money services like Airtel money, Telkoms T-cash, Equity Bank equitel, Iko Pesa, Mobi cash, Tangaza and family Bank Pesa Pap which enable subscribers to enroll, store and pull back cash and settle different bills at the comfort of their homes or offices. Overally, as at of December 2017 30 million users had subscribed to mobile money services. M- pesa the pioneer mobile money service by Safaricom was originally developed to enable microfinance borrowers repay their loans by using Safaricom airtime resellers located across various parts of the country. However this has transformed to win a large share of formal banking services in the country. According to Omwansa and Sullivan (2012) the banks were fighting hard to have M-PESA shut down one year after its launch because its popularity was spreading very fast and was posing a major threat to their operations.
Rajanikanta Khuntia, (2014) in this paper considered that even after 68 years of independence, around ten crore households are not connected with the banks in order to reduce the degree of “ financial untouchably” the new government has come up with a big bang action plan which is popularly known as “ Pradhan Mantri jan- Dhan Yogna”. It is a mega financialinclusion plan with the objective of covering all households in the country with banking facilities along poverty effectively, and to empower the last man in the last row in Indian economy. Jubair.T (2014) the objective of the research paper is to critically evaluate the benefits of self service banking machines in India. And the study also aims at comparing the services and costs associated with the use of these machines established in Indian Banks and he concluded that self service banking machines has made a paradigm shift in Indian Banking industry. Number of self service banking kiosks such as ATM, CDM etc has been installed and banks and financial institutions are taking advantage of these machines.
M-Pesa is a mobile money transfer service that allows monetary value to be stored on a mobile phone and sent to other users via text messages. It has been adopted in the vast majority of households in Kenya. A study, based on a survey of households across Kenya, finds that M- Pesa increased per capita consumption levels and lifted 2 percent of households (194,000 households) out of extreme poverty (Suri and Jack, 2016, p. 1288). The impacts, which were more pronounced for female-headed households, were driven in large part by a higher level of savings and changes in allocations of consumption and labour (from agriculture to business) (ibid). Mobile money can facilitate these changes by: decreasing the costs of remittances; making payments easier and safer; boosting small-scale trade; increasing the return to savings and future consumption; allowing greater access to credit, potentially increasing productive investment; and facilitating risk sharing (Suri and Jack, 2016). Others argue instead that while more than three quarters of Kenyan adults subscribe to M-Pesa and usage levels are
As the importance of financial innovation in developing countries including Kenya increases, so does the need for research on the subject. (Joseph et al, 2003). Despite the recognized importance of financial innovations and an extensive descriptive literature, there have been surprisingly few empirical studies. This situation has denied the banks the much needed information regarding this important area of financial innovations sometimes leading to reverse causality in the innovation-performance relationship. Mugambi (2006) attest that researches have been done on areas of service excellence and customer satisfaction in the banking industry. However, there was no study in Kenya that had looked at the impact of financial innovation on commercial banks with reference to financial performance. This study therefore, intends to investigate the relationship between financial innovations and financial performance of commercial banks in Kenya.
and number of users to reach or to be reached by in an M-banking net- work is an important factor in competition, is there a risk that one player will emerge as the largest one, and other, smaller initiatives die? That could in such case lead to a rural banking monopoly, which of course is not desirable. Further the competition regulator may be interested in if the new market entrant locks up customers to stay with a certain mobile operator. As financial systems are delicate due to consumer protection, mar- ket/consumer confidence and financial stability, and hence tightly regulated, they tend to be short of both innovation and competition. It is therefore crucial that relevant policy makers and regulators have the ability to take on a pragmatic approach, to take into account overall national development ambitions, to critically review and discuss limitations in traditional regu- lation for new initiatives as well as risks that these new initiatives may bring. In this review, consumer protection is central and of importance to all actors, as consumer protection relates to consumer confidence in banking serv- ices (which in many developing countries is weak amongst previously unbanked people). Consequently, consumer protection and consumer con- fidence is linked to the success and the sustainability of a new venture. It is further important that regulators across regulatory disciplines (finance, payments, AML/KYC/CFT, e-commerce, telecommunications, competi- tion) are discussing market evolution, opportunities and risks as well as the holistic legal and regulatory environment it requires.
According to Committee on FinancialInclusion, in India, only 27% of total farming households have access to formal sources of credit. On the other hand, 51.4% of farmers are financially excluded from both formal and informal sources of credit. According to NABARD, in the Central, Eastern and Northeastern regions, more than half i.e. 64% of farming households are financially excluded. Financialinclusion goes beyond opening of bank accounts; it is a comprehensive set of services that needs to be offered to the clients so that they can choose based on their needs from the services. The financial products services for the weaker sections and low income groups need to be in such a way that they enhance the credit absorption levels to go beyond basic consumptive credit needs. It has been observed that financially excluded segment require such products which may be customized to meet their unique needs. The aim of this paper is to explain the existing scenario of financialinclusion in India with different approaches of financialinclusion with reference to the model of Self Help Group-Bank Linkage Programme for financialinclusion in India.
There have been several reports on fraud in the mobile money market and the numbers continue to increase. Fraud in the context of mobile money is the intentional and deliberate action undertaken by players in the mobilefinancial services ecosystem aimed at deriving gain (in cash or e-money), and/or denying other players revenue and/or damaging the reputation of the other stakeholders. (Mudiri, 2017). There have been attacks on some mobile payments systems in Kenya. The Africa News reported on Kenyan job seekers being victimized by phishers. The article stated that cyber-criminals had created vacancies for accountants, brew masters and some other positions. The job applicants were expected to pay a “refundable” application fee of approximately US$70 via Safaricom M-Pesa system. There have also been reports that Kenya could lose up to US$23 billion through cybercrime in the mobilebanking industry if some security measures are not put in place immediately. Kenya is not the only African country on this list. Also according to an article by MicroSave, an
1.Author Profile:My Self Gowsya Shaik, I have completed MBA (finance&marketing), in the year 2011, M.com (Accounts) in the year 2017. Worked as an Asst.Prof in Nimra College of Engineering and Technlogy for the period of 6 years. Later joined in Full Time Research Scholar in KL Business School, Koneru Lakshmaiah Education Foundation, Vaddeswaram, AP, India. My area of research is Finance, topic on FinancialInclusion . Published 3 scopus articles and 3 ugc approved Journals.