In the same way that micro-credit – the extension of very small loans to low income individuals or businesses – started in developing countries before gaining traction in Western societies with people excluded from regular banking offerings, could poor countries also be showing the way in terms of mobile payment adoption?

Mobile phone operator Orange announced in early December the launch of a mobile payment and fund transfer service in Ivory Coast, in partnership with French bank BNP Paribas.

Subscribers can use their mobiles to deposit and withdraw money from their “Orange Money” account, conduct person-to-person fund transfers, pay bills, as well as recharge their phone credit. All without the need for a bank account.

Similar mobile phone-based initiatives have also been successfully tested as a substitute to cash in several  countries where the need for micro-finance is high, or places where the mobile payment model shows promise due to geography, such as island nations or remote rural areas.

With business models still being refined, mobile payment experiments in developing countries seem to be primarily driven by necessity and safety, rather than mere convenience.

Yet, while micro-lending initiatives were developed with poor countries in mind, they were found to be useful in catering for segments of the population in richer nations (for instance, unemployed or even homeless people) that did not qualify for traditional banking loans, no matter how modest in size. Micro-insurance offerings were also developed in recent years along the same lines.

Perhaps could the same people who benefit from such micro-finance offerings also use mobile payment technology, based on affordable pay-as-you-go  phone contracts, not just as a convenient way to check out at the grocery store, but as an alternative to a traditional bank account; safer than carrying around cash and offering access to a range of banking services.

Filed under: Payments, Retail Banking, Technology