Mobile Money Basics – The emergence of mobile money services in Africa has proven that banking is important and needed as compared to banks. Africans are very happy to have their banking needs fulfilled through non-bank institutions. So in short, “Banks, you can stay wherever you are.” The entire success of mobile money services is based on multiple factors, not just technology. We can comfortably say technology contributed 30% of its share, and the rest goes to strategy, business, how the product gets positioned or marketed, regulation, the environment, and support from governments.
Some Background – Mobile Money Basics
The purpose of this article is to provide valuable insights on mobile money or mobile payment systems to those readers who are keen on understanding its fundamental aspects and functionalities. Although this piece may be deemed simplistic by payment experts who are experienced in various forms, such as card payments, paper payments, mobile payments, mobile money, and internet payments, this is precisely the purpose.
The topics of mobile financial transactions and advanced computer intelligence are currently on everyone’s lips. The mobile money industry serves as a prime illustration of how to establish successful business models that require minimal technical assistance through the utilization of effective maturity levels, strategies, and comprehension.
It is impossible to completely eradicate technology from our lives. Organizations that have seamlessly combined operations, a clear vision, unwavering passion, effective governance, and a disciplined strategy can achieve remarkable success when equipped with the appropriate talents. Mobile money represents a prime instance of this phenomenon.
The game of mobile money becomes truly captivating when it is built on a foundation that includes big data, emerging technologies such as artificial intelligence, and various technical jargon. The main objective is to distribute fundamental and universal knowledge extracted from countless online papers and articles. Due to the increasing utilization of mobile phones, there is a significant opportunity to enhance financial accessibility at a more affordable rate than via physical branches. However, discussions regarding AI and blockchain will not be included in reference to mobile money.
Mobile Money Basics – Status
To date, cash is the king but mobile payments/money is making every effort to prove itself as economic freedom. In Africa, by the look of what’s going around, nothing needs to prove any more around mobile money and mobile payments. Although Mobile Money was designed as a peer-to-peer payment system, it has since gone much beyond from its basic idea. Today’s mobile money of
Africa helps in utility bill payments, airtime top-up, data recharge, cross border remittances, micro savings, micro-loans and many more use cases. The bundle of all these financial services are now known as Mobile Financial Services and its ecosystem is called an MFS system. Africa especially the eastern/southern part is known as the home of Mobile Money.
Mobile Payments are most frequently used and widely acceptable technological payment instruments. Closing the gap between unbanked people with access to mobile phones is one opportunity to scale up access to finance.
Mobile Money Key Stake Holders
- Mobile Money System provider and operator
- Mobile Network provider for customer base to target
- Agent network for selling basic key services (The liquidity of agents is extremely important.)
- Merchant network to accept payments
- Mobile Money Users
How about Security & Privacy
Electronic monetary values are or can be used for making payment transactions or sending them to another person in the form of settlements, payments, or more specifically electronic value products and services. To help consumer and address those challenges, Ernst & Young brings together a worldwide team of professionals with deep experience in providing assurance, tax, transactional, and advisory services.
To demonstrate issues around privacy, innovation, and security in digital payments. One point on the agenda was to highlight the need to accelerate the development of privacy and security as a basic requirement in any innovation. With this advancement, people can lift themselves out of a single mindset (being just inventors or disruptors). To use limited funds in the most effective way possible, we must fundamentally rethink our approach to development finance.
Points to Note:
All credits, if any, remain with the original contributor only. We have covered all the basics around mobile money systems and the importance of quality financial services data. In the next upcoming post, we will talk about implementation, usage, and practice experience for markets.
Books + Other readings Referred
- Research through open internet, news portals, white papers and imparted knowledge via live conferences & lectures.
- Lab and hands-on experience of @AILabPage (Self-taught learners group) members.
Feedback & Further Question
Do you have any questions about FinTech, AI, machine learning, data science, or big data analytics? Leave a question in a comment or ask via email. I will try my best to answer it.
Conclusion: Expanding financial access to the unbanked by offering convenient and real-time transactions, dramatically reducing transaction costs through micro-finance loans and domestic remittances, expanding points of access, thus reaching remote areas, and lessening the need to carry cash by creating a secure and safe way to transact There is no dull day in the payments business these days.
The unglamorous world of clearing and settlement is the recipient of generous attention due to the continuous launches of visible overlay propositions, often by non-banks. Established players are constantly anxious about protecting their hard-earned franchises, thereby confirming the emergence of the ‘new normal’.
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