Globally, mobile banking will become three times more popular than traditional banking by 2011 and MXit, the mobile social network and instant messenger, is poised to offer banks in Africa a safe, seamless transaction platform that eliminates entry barriers like data costs and safety.

Jaco Hattingh, CEO of MXit Africa, predicts that in Africa, where there are over 300-million adults with no access to financial services, there will be a mass move from traditional banking services, that offer savings and cheque accounts, to those that allow for person-to-person transactions through mobile devices.
“According to Gartner, 73-million transactions are expected for 2009. However there is room for further growth if we overcome challenges like financial literacy in developing countries, as well as trust issues involved with mobile technology and the related costs of accessing the internet via a mobile phone,” says Hattingh.
“This is where MXit comes in. The low data costs of operating a mobile social network and instant messenger allows banks to deliver mobile banking solutions that cost a fraction of the cost of normal data downloads through traditional mobile internet platforms.  We have proven that this can work through the transactional platforms that we’ve provided on MXit for two of South Africa’s leading banks. We’ve offered First National Bank (FNB) and Standard Bank clients the ability to do mobile banking solutions via MXit,” Hattingh adds.
Any FNB account holder can purchase MXit Moola (MXit’s virtual currency) for friends and family in a cost effective and safe manner via the MXit platform. Traditionally, Moola could only be purchased by means of a FNB credit card or a premium rated SMS. The Standard Bank mimoney payment method is for individuals who would like to transact on a website or mobi-site, but do not have access to a credit card. mimoney clients can now buy MXit Moola via mimoney without having to use a credit card.
These products are designed to meet the needs of the mobile-savvy market.  40% of the South African population, even though it is considered the most developed banking country in Africa, do not have access to a bank account.
“Mobile phones present an opportunity to provide quality banking solutions for all. In developing countries like Africa, with a huge unbanked market, innovative banking and payment services like these could provide the first step towards breaking out of the poverty trap for low-income individuals. While in developed markets it simply means convenience for an increasingly mobile lifestyle,” says Hattingh.
The challenges of increased access to mobile banking are clear – however by working with platforms such as MXit these challenges can be overcome by offering clients access to a cost effective mobile banking application that is available anytime, anyplace.  The mobile banking model is based on serving all income groups: teenagers, students, business, high net worth individuals and the informal sector are all able to access financial services via their mobile phones.
The banking industry’s growth in the African informal market is further aggravated by the tough anti-money laundering regulations set by governments which require proof-of-identity documents to be presented at a bank branch. Presenting these documents, in order to open an account, can often be prohibitively expensive for low-income customers.
“We believe that our transaction platform is an opportunity for all developing markets, not only Africa. Currently there are 4-billion mobile phones, but only 1,6-billion bank accounts. There is an enormous opportunity to reach the unbanked by means of mobile banking that is driven by MXit’s transaction platform. Developing countries are short of both physical banks and internet outlets, so banking from mobile phones is the logical solution,” Hattingh adds.