Are global mobile phones succeeding where cards are failing?

Global Fraud Focus: Examining cross-border issues

In June, the number of active mobile phones (or cellphones, as they say in the States) nearly exceeded the global population — rising from 6 billion in 2013 to more than 7 billion in 2014. (See GSMA Intelligence.)

Using mobile phones to make payments is nothing new. Mobile network operators began M-Pesa (M for mobile, pesa is Swahili for money) in Kenya in 2005. The service now has 17 million accounts. M-Pesa succeeded, in part, because Kenya is a large country with long distances between few banks. (See Enabling mobile money transfer: The Central Bank of Kenya's treatment of M-Pesa, the Alliance for Financial Inclusion.)

Only one in five Kenyans have access to traditional banking. However, now they can deposit, withdraw and transfer money, and make payments with their mobile phones. (See Expanding the Financial Services Frontier: Lessons From Mobile Phone Banking in Kenya, by Mwangi S. Kimenyi and Njuguna S. Ndung'u, Brookings.)