As of mid-April, mobile banking, a system that allows customers to conduct financial transactions through their mobile phones, went live in Egypt, with the new service being available for corporate and individual customers after almost two years of preparation. “The Ministry of Communications and Information Technology was reluctant to introduce the service for many reasons, most importantly the lack of security that Egypt has been suffering from since the 25 January Revolution,'' a senior official told Al-Ahram Weekly, but these obstacles have now been overcome. The ministry, which had been studying the new service for almost two years, had wanted to make sure that the mobile-banking service would be fully secured and that it would be able to provide the needed precautions to protect users before launching the service. The National Telecommunications Regulatory Authority (NTRA), together with the Central Bank of Egypt (CBE), decided last week to restrict the new service to banking activities conducted in local currency, part of the CBE's policy to limit demand for dollars. The three Egyptian mobile phone operators, Vodafone, Mobinil and Etisalat, are now preparing to provide the new service to customers. Ahmed Kamal, marketing supervisor for one of the companies, said that the mobile-banking service would cover deposit, withdrawal and money transfer transactions. Each mobile company would choose one or more banks to provide the new service. “The main requirement is for the customer to have a valid cell phone line or prepaid cell phone card with complete customer data,” Kamal said, adding that not all the features of the new service were clear. In order to use the mobile-banking service, customers would have to go either to their mobile phone company or to the bank chosen by their mobile company in order to open an account, he said. Customers would then be able to deposit, withdraw and transfer money by phone. “In phase one, the customer will be able to transfer money only to those also using the same mobile operator,” Kamal said. “This phase will last from five to six months, and then customers using different cell phone companies will be able to transfer money to each other,” he said. While deposits and withdrawals will be free, Kamal noted that there will be fees for money transfers. “The cost of the charges, as well as the minimum and maximum limits of the transfers, have not been determined yet,” Kamal said, adding that the mobile companies would announce them soon. Ahmed Othman, a research and development manager at one of the private banks, said that the new service would help to boost the economy, but that it should be highly secure. If not, it could be used for money-laundering or financing terrorist activities, he said. Othman said that the launch of the new service would mean that the ministry had taken the needed security precautions to guarantee the safe use of the service. Providing mobile-banking services was a must in the Egyptian market, he said, since only about 10 per cent of Egyptians have bank accounts and credit-card holders do not exceed two million. Conversely, there are more than 90 million mobile phone holders in Egypt. The new service would facilitate banking transactions by customers, as they would not need to carry cash and this would help merchants and business owners who sometimes have to carry large amounts of money. “It will help to boost the commercial and the industrial sectors,” Othman said. Moreover, the mobile-banking service can also be used for salaries and pension payments. “If the mobile-banking service had been used directly after the revolution, people wouldn't have suffered from cash shortages as a result of the bank closures,” Othman pointed out. Mobile-banking services are currently in use in many other countries around the world, Othman said, especially in Africa where there are few bank branches or sometimes no banks at all. “In these places, mobile banking is the only way to transfer money,” he said. According to a study conducted by Gallup World, an international polling centre, mobile banking is popular in African countries like Kenya, Tanzania and Uganda. The study said that two-thirds of Kenyans who had sent money to family members and friends living in different parts of Kenya had done so via mobile phones, making them the first among the populations of sub-Saharan African countries to transfer money via mobiles. Uganda and Tanzania came in second and third place, representing 43 per cent and 32 per cent of remittance senders, respectively. The Gallup study indicated that mobile-phone transfers were popular in poor and rural areas. According to the study, one of the key advantages of mobile technology is that it extends access to banking services to those who do not live near brick-and-mortar bank branches.
