With growth in cellular density slowing to a snails place, telecom operators are taking drastic steps to turn m-banking into the fastest growing banking channel in Pakistan.
But it turns out that telecom managers aren the only ones eyeing this business, as is evident by United Banks latest entry in the industry.
UBL Omni, which has been launched in 100 cities and towns across the country, aims to facilitate banking services outside traditional branches with the help of retail agents through any cell phone operator.
This is the second major m-banking product after the successful introduction of over-the-counter and other mobile services -- like bill payment, remittance transfers etc -- by Telenor & Tameer bank a few months back.
In trying to assess the potential of UBL Omni, Telenors Easypaisa provides a clue.
In less than six months, Easypaisa served more than 0.6 million utility bills transactions and transferred money worth Rs1 billion. And with the passage of time, as product awareness increases, volume of transactions is likely to witness steep growth.
A big growth area is likely to stem from the countrys rural areas, where about 65 percent of the population lives, and where other modes of banking transaction are sparingly available. This is where UBL can capitalize with its large branch network.
From the industrys perspective; if this trend catches on and other bigger players like PTCL and NBP join hands with each other, m-banking can potentially change the dynamics of Pakistans banking environment
At present, an estimated 89 percent of the countrys adult population is unbanked, as conventional banks haven been able to penetrate owing to high cost of operations and dispersed population.
M-banking, however, is relatively cost effective for bankers to cater services via retail agents and mobile phones. High mobile density further supports the optimism of m-banking service operators.
Likewise, for mobile users, it is more convenient to avail banking service through cell phones, rather than other modes of transaction, owing to time flexibility, safety and speed.
It is also in the interest of the government as m-banking can provide impetus to increase savings in rural areas, which has been witnessing higher growth in agriculture income and foreign remittances, while also containing the currency-in-circulation within reasonable limits.
Whether the m-banking industry will meet expectations, however, is both a question of regulation and, of course, a test of patience.