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Mobile Electronic Commerce by June Wei

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315
chapter sixteen
Automated teller machine
andmobile phone interface in
a developing banking system
Abel E. Ezeoha and Anselm Nkalemu
16.1 Introduction: Emergence and growth
of mobile phone and automated teller
machine penetration in Africa
Two major visible revolutions that have very directly changed the ways
and manners business was conducted in Africa over the last one and a
half decade are the growth in the popularity of electronic payment (via
automated teller machines [ATM]) and the rapid explosion in mobile
phone penetration. It is interesting to note that before the year 2000,
ATM terminals, for instance, were nonexistent in most parts of the sub-
Saharan Africa (SSA). Today, this channel of bank service delivery has
been fully integrated into the economic and social fabrics of the entire
African society. Unlike the era when ATM card ownership was restricted
Contents
16.1 Introduction: Emergence and growth of mobile phone
andautomated teller machine penetration in Africa ...................... 315
16.2 Nature and benets of ATM and mobile phone interface ...............318
16.2.1 Pluralism argument .................................................................. 319
16.2.2 Business efciency argument.................................................. 320
16.2.3 Economic development argument.......................................... 320
16.3 Pre-e-banking environment in Nigeria ............................................. 322
16.4 Emergence of ICT-basedbanking regime in Nigeria ...................... 326
16.5 ATM operational environment in Nigeria ........................................ 331
16.6 Statistical tests of the relationship between ATM and mobile
phone penetration rates ....................................................................... 335
16.7 Conclusion ............................................................................................. 339
References ........................................................................................................340
316 Mobile Electronic Commerce
to high-end bank customers, now, in most parts of the continent, having
a bank account overwhelmingly qualies an individual to be issued with
an ATM card. Similarly, before the 1990s, telephone services and telephone
line ownership was an exclusive preserve of rich individuals and busi-
nesses in Africa. Then, only xed landline telephones were in existence;
and the average telephone penetration rate in the SSA region was just
0.86per 100 persons in 1985, compared with 1.48 and 1.57 per 100 persons
in 2000 and 2005, respectively (based on the data from World Development
Indicators). The recorded increase was largely due to the emergence and
increase in the popularity of the mobile telephone system in most parts
of the continent. The erstwhile barrier against telephone ownership and
access has consequently been dismantled—thus making mobile phone
emergence an effective tool for bridging the digital divide between the
rich and the poor (Helton, 2012).
No doubt, the value and importance of the payment and telecom-
munication revolutions continues to be on the increase. There are for
instance, a number of empirical studies linking each to economic growth
and development. Abraham (2007) used the Indian case to demonstrate
how the mobile phone improved the supply chain and enhanced the liv-
ing standard of Indian shermen. Another study by GSM Association and
Deloitte revealed that a doubling of mobile data use brought about an
increase of 0.5 percentage points in the GDP per capita growth rate across
selected 14 countries, and that countries with higher level of data usage
per 3G connection had seen increases in GDP per capita growth exceed-
ing a percentage point” (GSM Association, 2012). Regarding the impact of
the ATM, the summary of a 56-country study on the impact of electronic
payment on economic growth by Moody’s Analyst (2013) showed that (1)
the increased usage of electronic payment products added $983 billion
in real (US) dollars to GDP in the countries studied; (2) card usage raised
consumption by an average of 0.7% across the 56 countries; (3) that con-
sumption contributed to average additional growth in GDP of 0.17% point
per year for this group of countries. The study further indicated that real
global GDP grew by an average of 1.8% during that time period in those
countries; the additional GDP growth was realized solely by increased
card usage and penetration was equivalent to creating 1.9 million jobs
during the period of study; and that “a future 1% increase in card usage
across the countries in the study would produce an annual increase of
0.056% in consumption and a 0.032% increase in GDP”.
In addition to this interesting revelation, industry practitioners and
policymakers have remained constantly in search of optimal strategies
that can guarantee more inclusive nancial and economic systems, as well
as efcient business operations. The argument in this direction is that an
inclusive nancial/economic system is capable of lifting a huge percent-
age of the worlds population from poverty.

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