Are ride-sharing companies the new banks?

(Sept 5): In Southeast Asia, mobile banking is taking on a whole new meaning. Last week, Grab, one of the region's top ride-hailing companies, announced that users of its app can start sending credits -- used to pay for rides -- to each other. By the end of the year, they'll be able to use those credits at more than 1,000 restaurants and retailers. If all goes well, Grab will one day be known as an e-payment platform that just happens to offer a taxi service.

That's a radical evolution, but hardly illogical. As many as 2 billion people lack access to traditional financial services worldwide. Most are concentrated in developing countries with cash-based economies, where banks have long resisted offering services such as loans, checking accounts and credit cards. As incomes in these countries rise, technology is helping entrepreneurs leapfrog old ways of doing business. In particular, mobile phones have enabled a parallel financial system to evolve, with some intriguing results.

The trend began in Kenya. In 2007, Safaricom introduced M-Pesa, a service that allowed users to move money via text message. In short order, M-Pesa evolved into a full-fledged payment-and-banking system that runs on the region's dominant feature phones. In 2016, M-Pesa processed 6 billion transactions for 30 million customers in 10 countries. Africa now has more "mobile money" accounts than it has bank accounts.

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