Mobile banking in the ‘first world’ is so, well, ‘third world’.

Today Barclays launched Pingit, a new service that allows you to send money via your mobile phone to other UK bank accounts. You have to be a Barclays customer to send money. It seems astonishing in 2012 that this is heralded as a, ‘new’ service in the UK. MPesa, has operated very successfully, initially in Kenya, Tanzania and Afghanistan, since 2007.

This film made in 2009 shows the effect M-Pesa has had on the Kenyan population.

It is not technology that has held back the  adoption of mobile wallets, it’s the struggle that large, highly profitable organisations have in adopting new ideas. Disruptive innovation will almost always come from organisations that focus on markets and services that are seen as insufficiently profitable for the incumbent players to worry about.

This short summary of the ideas behind Professor Clayton Christensen’s ‘Innovator’s Dilemma’ gives a good overview of the principle in action.

The bigger news today, is that this shows how concerned that banks are not in providing a better service for their customers, but in having their very nice, highly profitable, lunch being eaten by newer, disruptive players in the market. Perhaps mobile money’s time has come. Barclays are far from the only organisation that is waking up to the threat – most of the large banking players are trying to work out what to do but they also have the significant problem of not wanting to disrupt and cannibalise their existing business. Mastercard for example have operated simple phone-based bank accounts in countries such as the Philippines for several years but they are very afraid that by operating these types of service in more developed countries, their existing, highly profitable business will be severely impacted.

We shouldn’t really be thanking Barclays for introducing an innovative service – they are fighting for their lives and trying to do it on their terms. From the look of the comment threads attached to the news reporting, (here for example), people remain sceptical.

The banking and financial services industries are ripe for disruption.

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4 responses to “Mobile banking in the ‘first world’ is so, well, ‘third world’.”

  1. Jay Gould says:

    What Barclays’ Pingit ( does in Britain sounds very much like what Dwolla does here in the U.S., up to the pricing, because, while Pingit is free, Dwolla charges $0.10 per transaction above $10 (anything below that is free). The thing is that, if a British bank is doing it, soon enough its American cousins will start doing it too and I just don’t see how Dwolla could compete with them as a stand-alone service. After all, Dwolla has to charge something, however small the amount, while the banks apparently do not. For analysis:

  2. Not sure I agree with the conclusion. Banks are likely to start charging for services when they can in my experience…

    I actually think companies like Dwolla, Square and other nimble, innovative businesses have a very good chance of transforming some elements of the financial services industry.

    Remember when PayPal was a startup? No one in the banking industry expected them to succeed…

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