What Costco, Verizon, AAA Can Teach You About Checking Accounts

by Edward O'Brien 0

A main driver worldwide in the financial services industry is the partnerships developed between financial institutions and innovators, particularly those targeting under-served markets.

In the United States, the prepaid card market continues to be a hotbed of investments in developing depository accounts that rival traditional bank and credit union demand deposit accounts. Outside the U.S., it is mobile money services leading the way in regions where banking services lack a national footprint. In Africa, Safaricom has led the way with its highly successful M-Pesa product. It’s most recent innovation is M-Shwari, which translates into “no hassle.” The new product expands on expands on M-Pesa’s mobile banking/payments products to include services previously reserved for traditional financial institutions.

From Business Day Live:

M-Shwari is a new banking platform that allows subscribers of Kenya’s biggest mobile network, Safaricom, to operate savings accounts, earn interest on deposits, and borrow money using their cellphones. It expands on Kenya’s revolutionary use of sending money by cellphone — known as M-Pesa, “mobile money” in Swahili — launched in 2007 and now widely used across the country, where about 70% of people have cellphones.

Commercial Bank of Africa, a $1bn privately owned bank in Kenya, is providing the necessary infrastructure to M-Pesa. With a cross-sell population of approximately 15 million M-Pesa subscribers, the alliance underscores the potential for the banking industry to essentially outsource innovation to technology companies using venture capital to make the R&D and marketing investments and take the risks necessary to find new categories of accountholders. In the U.S. market, similar alliances are being forged between insiders and outsiders, such as AMEX/Walmart (Bluebird), BofI (Bank of the Internet) Federal Bank/Moven, and The Bancorp Bank/Simple.

Click here to read more from Business Day Live.

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