One of the most exciting trends in banking and commerce is the rise of mobile payments. The effectiveness of mobile payment solutions, where individuals can purchase items directly through their cell phones without needing to go through a bank, is well-established in Africa where it has helped bring millions of unbanked citizens into the formal economy.
The United States is now getting in on the action. A few days ago, Amazon announced its new Mobile Payments Service, a one-click payment option to purchase items without needing to enter in any additional payment or shipping information. Boku launched earlier this year and facilitates micro-payments, especially for virtual goods for games like Mafia Wars, through cell phones.
Other notable examples:
- Absa, a South African bank, just won the award for "Most Innovative Bank in Africa" for its cutting-edge services including Cash-Send, a card-free banking solution, as well as banking the disabled.
- Splash Cash is beginning supplant Western Union as the preferred method of transfering funds between individuals in Sierra Leone. Customers can purchase credits on their phone and transfer money directly to another phone without ever touching a bank. And with a fee of only $4 for a $300 transfer and the ability to cost-effectively (only 16 cents) transfer sums as low as $1.50, the price gouging of Western Union may become obsolete.
- We've covered earlier MGive, which lets lets you text money immediately to your favorite non-profits.
Finally, MoneyAuction, a Korean P2P lending company is now allowing borrowers and lenders to seek and bid on loans directly from cell phones. This seems like a great direction for U.S.-based p2p lenders to take. The infrastructure isn't quite there yet to support it, but with their emphasis on cutting out the bank, p2p lending companies could take the concept one step further by enabling mobile loan payments and lending.
Flickr credit: Lorianne DiSabato