Mobile banking is a system that allows customers of a financial institution to conduct a number of financial transactions through a mobile device such as a mobile phone or personal digital assistant. Mobile banking differs from mobile payments, which involve the use of a mobile device to pay for goods or services either at the point of sale or remotely, analogously to the use of a debit or credit card to effect an EFTPOS payment.
The earliest mobile banking services were offered over SMS, a service known as SMS banking. With the introduction of smart phones with WAPsupport enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers.A specific sequence of SMS messages will enable the system to verify if the client has sufficient funds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When depositing money, the merchant receives cash and the system credits the client's bank account or mobile wallet. In the same way the client can also withdraw money at the merchant: through exchanging sms to provide authorization, the merchant hands the client cash and debits the merchant's account.
Mobile banking has until recently (2010) most often been performed via SMS or the mobile web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the mobile device. With that said, advancements in web technologies such as HTML5, CSS3 and JavaScript have seen more banks launching mobile web based services to complement native applications. A recent study (May 2012) by Mapa Research suggests that over a third of banks have mobile device detection upon visiting the banks' main website. A number of things can happen on mobile detection such as redirecting to an app store, redirection to a mobile banking specific website or providing a menu of mobile banking options for the user to choose from.
In May 2012, Laxmi Bank Limited launched the very first mobile banking in Nepal with its product Mobile Khata. Mobile Khata ran on a third-party platform called Hello Paisa that was interoperable with all the telecoms in Nepal viz. Nepal Telecom, NCell, Smart Tel and UTL, and was also interoperable with various banks in the country. The initial joining members to the platform after Laxmi Bank Limited were Siddartha Bank, Bank of Kathmandu, Commerz and Trust Bank Nepal and International Leasing and Finance Company. Such a platform that is interoperable between multiple banks and multiple telecoms is the first of its kind in the world of Mobile Banking so far.
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