Mobile banking and payments

In many countries, mobile phones are used to provide mobile banking services, which may include the ability to transfer cash payments by secure SMS text message. Kenya's M-PESA mobile banking service, for example, allows customers of the mobile phone operator Safaricom to hold cash balances which are recorded on their SIM cards. Cash may be deposited or withdrawn from M-PESA accounts at Safaricom retail outlets located throughout the country, and may be transferred electronically from person to person as well as used to pay bills to companies.

Branchless banking has also been successful in South Africa and Philippines. A pilot project in Bali was launched in 2011 by the International Finance Corporation and an Indonesian bank Bank Mandiri.

Another application of mobile banking technology is Zidisha, a US-based nonprofit microlending platform that allows residents of developing countries to raise small business loans from web users worldwide. Zidisha uses mobile banking for loan disbursements and repayments, transferring funds from lenders in the United States to the borrowers in rural Africa using the internet and mobile phones.

Mobile payments were first trialled in Finland in 1998 when two Coca-Cola vending machines in Espoo were enabled to work with SMS payments. Eventually, the idea spread and in 1999 the Philippines launched the first commercial mobile payments systems, on the mobile operators Globe and Smart.

Some mobile phone can make mobile payments via direct mobile billing schemes or through contactless payments if the phone and point of sale support near field communication (NFC). This requires the co-operation of manufacturers, network operators and retail merchants to enable contactless payments through NFC-equipped mobile phones.