The mobile phone

Since the invention of the consumer mobile phone in the 1990s, mobile phones have spread around the world, with more than one for everyone on the planet. The original leader in mobile phones was Motorola, which dominated the sector from 1992 to 1998, when Nokia’s mobiles took the lead, holding that position for almost 14 years until Samsung took the lead in 2012.

Finnish manufacturer Nokia created one of the first affordable models of mobile phone, and the brand became popular around the world from the early 2000s. Nokia also made texting via SMS (Short Message Service) popular and was the first handset manufacturer whose GSM or 2G phone line supported user-sending of SMS. Users could buy prepaid credit or airtime for the phone, and this enabled early use of phones for sending money. The world’s first mobile money deployment, Smart Money, was launched in the Philippines in 2001 (by MNO Smart Communications in partnership with Banco de Oro) to fill a gap left by the limited reach of banking infrastructure in the country.

The feature phone, still widely used in emerging economies, became a major tool for mobile money in 2007, when Kenya’s Safaricom launched a mobile money service that allowed users to send and receive money on a mobile phone.

It was Apple’s iPhone that provided the breakthrough to enable financial services. Released in 2007, the iPhone featured a full glass screen and no keyboard, but just as significant as the design was the distribution mechanism. In 2008, Apple launched an App store on the phone, enabling customers to purchase and download applications built by third-party developers specifically for the mobile phone. The iPhone was quickly followed by other brands of smartphone and Google developed an operating system called Android. 

Later in 2008, Google launched the Android Market, changing the name to Google Play store in 2012. The sales of smartphones has increased hugely between 2008 and 2020, with sales of 139 million in 2008 rising to 1.38 billion, an increase of one thousand times. Google and Apple continue to dominate the app stores, with Google’s Android system taking a 72.2 percent share, Apple’s iOS taking at 26.9 percent, and the remaining fraction of less than one percent shared by minor players.

The arrival and widespread adoption of the smartphone and the app store opened the way for the first mobile-first banks.