Cell Phone Banking Adoption in South Africa – Introduction

Cell Phone Banking Adoption in South Africa - IntroductionIn the last three decades, advancements in information and communication technologies (ICTs) forever revolutionised banking. Once, a bank was confined to four walls and a roof; today that is no more. Automated teller machines (ATMs), debit cards, the Internet, and mobile phones now can all represent a bank, in that consumers can use these devices to conduct banking independent of a bank branch. Banking technology experts including Devlin (1995) and Devlin and Yeung (2003) agree, and explain how technology has tipped remote (anytime and anywhere) banking into the mainstream Western culture. For instance, ATMs or cash machines iconify 21st Century banking institutions. To some extent, this also applies to many African countries. For that reason, Brown, Cajee, Davies, and Stroebel (2003) posit that the widespread adoption of ICTs and mobile phones in South Africa provides opportunities for banking services to reach critical masses of consumers. The latter is particularly applicable even in remote areas inaccessible to bank branches (Kumar & Gupta, 2008). Despite this, uptake of cell phone banking (CB) is still low.
Latest statistics reveal that the South African cell phone market surpassed 48.5 million subscribers by the end of 2010, up from 45 million and 13 million subscribers in 2008 and 2002, respectively. For a developing nation of 50 million people, a mobile coverage of about 97 per cent is impressive given that cellular telephony was only introduced in South Africa in 1994. Such an exponential growth, naturally, presents enticing propositions for marketing and business. More so the financial services sector in particular the marketing of remote banking technologies such as mobile banking.
Although Brown et al. (2003) argue that increased diversity of cell phone improves CB adoption, such claims still remain untested and unverified. Despite extensive CB research having being conducted in the West, very little research in the area has been done in South Africa. Literature searches by the authors, in academic journals on cell phone banking in South Africa, resulted in only one study – Brown et al. (2003). Given that ICTs are developing at phenomenal rates, the context of cell phone banking, today, may have differed significantly from 2003. It is therefore opportune to examine mobile banking in South Africa.
Given the paucity of empirical research, data on CB customers is scanty. It is difficult to ascertain consumer motivations for adopting or rejecting CB. Building on the study by Brown et al. (2003) which considered predictors of mobile banking in South Africa’s Western Cape Province, this study extends the study to three other South African provinces: Gauteng, Mpumalanga, and Limpopo.
The remaining sections of the paper are as follows: the following section discusses cell phone banking in South Africa. Next, the mobile banking adoption framework is presented. The methodology and findings sections are presented followed by the discussion of results and concluding remarks.