Obopay and Grameen Solutions have announced the new Bank A Billion Initiative, which aims to provide microfinance services through cell phones. The project, which will begin in Bangladesh and Mumbai, India, will allow customers to complete a number of financial transactions, including savings, money transfer, payments and micro-credit, using only their cell phones starting in October 2008.
The premise of the project is to provide access to basic financial services through cell phones, reducing the need for costly personal contact between financial institutions and their customers. The initiative hopes to take advantage of the rapid spread of cell phones in developing areas, especially in areas without access to microfinance services.
Specifics about the project, however, remain scarce. It is currently unclear whether mobile banking services will be offered in conjunction with normal microfinance operations. The new website dedicated to the endeavor is also yet to specify what kinds of bank accounts will be necessary to utilize the cell phone banking technologies.
This announcement comes after the Reserve Bank of India (RBI) declared that it will post new mobile banking guidelines at an unspecified date and warned financial institutions to “dissociate themselves from any mobile based money transfer service which has not received explicit approval of RBI or not covered by any of the guidelines issued.” According to finextra.com, the new guidelines will force mobile payments plans to follow normal money laundering and ‘know your customer’ rules.
Obopay, founded in 2005, is a United States mobile payment company that allows customers to purchase goods or transfer money without visiting a bank. Their technology allows customers to access banking services through text messaging, cell phone applications and its website. Carol Realini founded the company after noticing the expansive penetration of cell phones into areas that lacked basic financial services. The company is privately held and major investors include a number of venture capital firms.
Grameen Solutions is an information technology consultancy. It partners with other Grameen organizations, as well as businesses from around the world, to offer technological solutions for businesses and other organizations in Bangladesh. The company’s specific areas of expertise include outsourcing, software development, poverty solutions, and emerging market technologies. Grameen Solutions’ new website did not explain sources of funding for the organization beyond listing partners for various projects. Nobel Prize Laureate Muhammad Yunus is the chairman of the company.
By Greg Casey, Research Assistant
Additional Resources:
The Economic Times: Obopay, Grameen in alliance for mobile banking services
The Earth Times: Obopay and Grameen Solutions Partner to Bank a Billion
Bankabillion.org: Home
American Banker: Obopay, Grameen in Mobile Initiative
ContentSutra: Obopay, Grameen Solutions Tie-Up For Mobile Payment Services For The Poor
Finextra: Indian banks told to halt m-payment schemes
Obopay: About Us
Obopay Press Release: OBOPAY AND GRAMEEN SOLUTIONS PARTNER TO BANK A BILLION
Grameen Solutions Press Release: Grameen Solutions Ltd. Enters Partnership with Obopay, Inc. to Bring Low Cost Mobile Banking to Poor
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