Charlotte Zukenwa, Tshepo Ronald and Lindiwe Ngubeni pound the pavement in Soweto, South Africa, signing up customers for Wizzit, a service that provides cell phone-based bank accounts for low-income people who have little access to regular banks.
A year ago, Tsepho Ronald was a part-time carpenter in Soweto, watching his jobless friends getting into trouble with the law. He saw jail looming for himself if he didn't find a better life.
So he decided to become a "Wizzkid" - one of about 4,500 unemployed young people across South Africa who have been trained as sales agents for Wizzit, a fast-growing mobile banking company. It's challenging work, but he's learning a lot about the banking industry.
"Most people are scared to open a bank account," says the 24-year-old salesman. "They say, 'The bank will eat our money.'" Wizzit and other mobile financial services, including the popular M-Pesa in Kenya, are overcoming those barriers and helping low-income Africans make financial transactions across long distances with their cellphones, reducing their travel costs and eliminating the risks of cash, while avoiding most banking fees.
It's part of a phenomenon that has people in Africa adopting new technologies that have been slower to catch on in more developed parts of the world, where individuals and institutions cling to older, existing infrastructure. People in Africa who have never used an ATM card, banked online or even had a bank account are using their mobile phone for financial transactions, while Internet users are skipping cable modems and going straight to wireless broadband.
In Soweto, Mr. Ronald says he is signing up dozens of new customers a month. It takes only five minutes and an investment of less than $10 to open a Wizzit bank account on any ordinary cellphone - even a shared cellphone. The virtual bank has well over 300,000 customers across South Africa (although it doesn't divulge exact numbers) and is expanding into Romania, Zambia, Tanzania and other emerging markets. The vast majority of its customers have never had a bank account before.
"Five years ago, when we launched, the big banks were not convinced that mobile banking would ever work," said Brian Richardson, co-founder and managing director of Wizzit. "In fact they said it wouldn't work - they said nobody would make a payment on a cellphone when they had a perfectly good PC in front of them. Their mindset was really focused on their existing bank customers."
After Wizzit pioneered the technology, the banks caved in and created their own mobile banking services, which now have about five million customers in South Africa alone.
Mobile banking is a godsend for poor rural families and migrant workers, still the backbone of most African economies. They can pay bills and transfer money without the high cost of hiring a car. In Kenya, mobile money has reportedly boosted the incomes of rural households by 5 to 30 per cent.
"It becomes such a simple solution," Mr. Richardson said. "Ten seconds on the phone and it's an instant transfer to your mother who is 400 kilometres away, at virtually no cost. There are huge savings in time and transportation. It could be a major boost for African countries."
It could also reduce dependence on cash. The equivalent of $2-billion in cash is kept under mattresses in South Africa alone, Mr. Richardson said. Bringing even a small percentage of it into the banking sector could be a substantial benefit to the economy.
Mr. Richardson believes mobile banking is an example of the innovations that Africa will need for its future growth. "I think there are enormous opportunities in Africa," he said. "But I'm not sure if Western models are going to work here. It's going to require a different way of thinking. It takes time and innovation to uncover different models and technology."
Geoffrey York