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Cell boom creates base for low-cost banking

Cellphones are already used for music downloads, text messaging, and video games. But here in South Africa, they are beginning to perform another function: personal piggy bank. With the new technology, a grandmother in rural area can receive money from her son, working hundreds of miles away, with the beep of her cellphone. A teenager can buy groceries with a few punches of keys. Not a coin need change hands.

It`s a high-tech solution designed to help poor people here who never have had access to banks, cash machines, or credit cards. And it`s another example of using digital technology to fast forward development in remote areas. Last month, one of South Africa`s main cellphone networks and one if its largest banks launched a new cellphone banking system that they hope will bring millions of poor South Africans into the official economy for the first time. The venture hopes to build on the rapid spread of pre-paid cellphones to create a whole new banking system, one designed for low-income users that have long been under-served or ignored by traditional banks.

For many poor South Africans, the system offers a first step into a world that can help them save, send, and receive money. With a few key punches, they can send money to a relative or pay for goods without ever seeing a paper bill - a benefit in a country with a high crime rate.