WITH more people now having access to a cellphone than a bank account, SA's big banks could be on to a new revolution where the mobile device becomes a virtual bank and also a tool to reach the unbanked.

This is also true for other developing economies such as Kenya, where the World Bank says that the M-Pesa mobile money transfer service has become one of the fastest growth sectors of the East African country.

SA, which has one of the highest mobile penetration rates in sub-Saharan Africa, provides the perfect ground for banks to exploit the convergence between mobile and banking technology, analysts say.

Estimates show that there are more than 60-million SIM cards registered with SA's four mobile phone operators.

Analysts say the cellphone is arguably the most ubiquitous modern technology so far this century and is fast shaping the relationship between its owners and consumer-facing companies such as banks and retailers.

Bankers also predict a wave of banking apps being launched in SA as the penetration of smartphones increases and their cost comes down owing to the proliferation of competing models.

"The growing sophistication of phones - both feature and smartphones - is resulting in new options and opportunities for customers of cellphone banking," says Ravesh Ramlakan, the CEO of FNB Cellphone Banking. "The customer is driving the pace of innovation in banking, and our job is to be available to them where they want to transact," he says.

Jonathan Houston, the digital marketing lead executive at Deloitte's consulting technology division, says no-one ever imagined how the cellphone would transform people's lives.

He says this is particularly true of banks, which are being led by consumer demands to innovate, rather than the banks deciding what is best for customers.

Mr Houston says the joke used to be that a bank without internet banking was "dead in the water". Now, he says, the shoe is on the other foot and "if you don't have a banking app you are dead in the water. That is a trend that is coming not for the sake of innovation but is being driven by the consumer."

FNB was first to market with its bank app a year ago and rivals Standard Bank and Nedbank have since joined the fray, with Absa's plans yet unknown. In terms of market share, FNB and Absa claim to be neck on neck on the number of registered mobile banking customers, each claiming to have more than 3,2-million users.

Now the banks want to stretch mobile banking to new frontiers such as launching advanced payment systems that use new technology such as Near Field Communications (NFC). With an NFC-enabled cellphone, one can use it to pay for goods and services rather than with cash, a debit or credit card. Absa claims to be the first bank that last year started testing NFC technology. Standard Bank has also launched its own NFC payment option for commuter transport customers in Cape Town and Durban.

Not to be outdone, FNB in May launched a person-to-person payment option called Geo Payments using its banking app, which allows payment to be made without using a person's bank account details.

Mr Houston says such innovations herald the approach of a cashless environment which can make debit and credit cards redundant.

"The benefits will not only be felt by consumers, who will be able to make payments using their phones and no longer carry cards," Mr Houston says.

"Ultimately, the pressure will be on financial institutions, business and retailers to prepare for the coming payment revolution."

However, it is in the rural areas where local banks see the cellphone as their alternative to building branches.

A large percentage of the bulk of the more than 11-million unbanked or underbanked people in SA receive money sent by cellphones from relatives working in urban areas. This is where mobile banking becomes relevant, bankers say, as it is a cheaper and faster method of transferring money.

This is confirmed by a new report by the World Bank which says mobile money is often successful because it is considerably cheaper than other alternatives to cash. It quotes a global comparison of 26 banks in 2010 which found out that branchless banking (including mobile money) was 19% cheaper on average than alternative services.

Arthur Goldstuck, the MD of telecom research company World Wide Worx, says the popularity of money transfer using cellphone banking is one of the reasons why stand-alone mobile money transfer services have not taken off in SA.

"There simply is no desperate need for them as there is in other African countries," says Mr Goldstuck, whose company this week released a study on cellphone usage in SA.