The spread of mobile phone in South Africa has given birth to a new opportunity, where the utility of a mobile phone can be more than a mere communication device. South Africa Standard Bank and a local cellular operator, MTN have jointly ventured to offer a very innovative banking service through cellphones. It is called MTN banking. This article discusses in detail Standard Bank's cellphone centric banking innovation.

In a country which is the most progressive country in its continent so far, majority of the population live in villages and is still very poor, illiterate and underserviced. They do not have proper access to fixed-line telephone services and banking facilities. Most of the commercial transactions in these villages are made in cash and are therefore highly vulnerable to thefts and security risks. In such a situation, South African Standard Bank and a local cellular operator, MTN have jointly ventured to offer a very innovative banking service through cellphones. It is called MTN Banking. For the bank, the benefit lies in getting access to millions of customers who live beyond its network infrastructure, and for MTN, it is an added money-making service offered to a population which uses mobile phones more because of the absence of fixed line telephone network. Though it is hard to predict whether MTN Banking will thrive, but it's also impossible to dismiss the possibility of success given the tremendous growth and penetration of mobile phone technology in South Africa so far.

South Africa is an upcoming and sophisticated free-market economy on the African continent. Though the country occupies only 3% of the continent's surface area, it accounts for 25% of the gross domestic product, 45% of the industrial output, more than half of the generated electricity and 45% of the mineral production of Africa. Major contributors to the economy include the mining sector, manufacturing and agriculture. The country has a financial and industrial infrastructure with excellent growth potential. The South African Economy has a consumer Price Index of 3.9% in February, 2006, which is 0.1% lower than 4% in January 2006. The annual percentage change in the Consumer Price Index excluding interest rates on mortgage bonds (CPIX) for the historical metropolitan and other urban areas is 4.5% in February 2006 (i.e., the CPIX in February 2006 compared with that in February 2005). This rate is 0.2% higher than the corresponding annual rate of 4.3% in January 2006. The production Price Index for all commodities for South African consumption has shown an annual increment of 5.5% in February, 2006.

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