Mobile Money – My assertion that the integration of mobile phone technology will revolutionize the financial industry in 2013 is bolstered by various factual justifications. The notion of incorporating financially marginalized individuals into the system has long been disregarded, but it is now receiving the appropriate recognition and attention. Mobile financial services offer a broad range of opportunities, encompassing mobile money, mobile payments, mobile banking, mobile commerce, and additional potential applications.
Rise of Mobile Money
The payment sector is currently undergoing a significant transformation as a result of the emergence of digital payment technologies. This transformation is being greatly facilitated by mobile money, which is now a leading force with the help of advanced technology such as data science and machine learning. The current transformation is leading to beneficial growth for emerging digital economies.
The word “Pay” has gained widespread popularity in present times, resulting in the emergence of numerous new startups venturing into the Mobile Payment sector on a regular basis. Banking services can be conveniently provided using mobile phones. I am distinguishing between the concept of banking and the physical institutions known as banks. Modern banking services no longer rely on traditional financial institutions. Utilizing transactional data may facilitate establishing client credit records for providing supplementary services.
Yesterday I was reading on the internet that around 2 billion people don’t use formal financial services, and more than 50% of adults in the poorest households are still unbanked. The domain of mobile financial services is quite versatile and can support a variety of services, in particular person-to-person (P2P) money transfers, and now very easily crosses borders without visa requirements (regulations or KYC), including cross-border transactions, which are of significant value for emerging economies.
Mobile Money Adoption
The acceptability of mobile money under Mobile Financial Services was the biggest breakthrough. The role of the mobile money agent is crucial and very critical for the success of this service. The agent selection criteria, as well as agent distribution on the city or country map, are also very critical.
The effectiveness of the mobile payment system hinges on a collaborative endeavor by all parties involved to provide a solution that addresses the requirements of the populace and leaves no one behind. The rationale behind this is straightforward: financial inclusivity has become a crucial requirement for individuals, and with the impending interconnected era, a smartphone will revolutionize people’s lives in ways that are currently unimaginable.
From a financial inclusion perspective, mobile money services were essentially for unbanked and underprivileged customers, but due to the unavailability of a Ministry of Innovation as well as strong control from central banks, this got lots of support and attention, resulting in rapid growth for those providers who got the principles right, though the majority of such services failed (no offense to any, just referring to the statistics available across the globe on successful and vanished mobile money deployments).
Mobile Payments Domain
Well-known and established big brothers in the mobile payments space are not bothered by these startups to the point that they ignore them and treat them as if they don’t exist. It is like a very famous saying: “The biggest mistake of forgetting one small mosquito is enough to keep you awake the whole night”. Methodologies or approaches that are basic in nature but without clear relevance to the challenge always get into closure mode, like a deep, thick mud soup from which it’s impossible to come out.
The main drivers behind the success of mobile payments are the explosive growth in the number of mobile devices and the fall in the cost of computing power, which has lowered the barriers for new entrants in this field.
Money transfers, retail purchases, bill payments, welfare payments (savings clubs in Africa created by small rural communities to support them in times of need and other social services), savings for mobile, microinsurance, withdrawals, and domestic and international (cross-border) remittances are now common services offered by mobile money service providers.
From Myth to Reality
The notion of mobile financial transactions has surpassed mere discussions in academia and on informative television programs. Currently, forward-thinking individuals are emphasizing the importance of leveraging the intersection of industries that generate dissatisfaction among consumers while also generating substantial profits for stakeholders. By adopting this strategy, they can attain maximum market success by gradually diminishing the prevalence of established competitors’ highly desirable products.
How to increase access to financial services to drive financial inclusion through the channels they build, and to also offer instructions on how to build value propositions that really persuade mass-market customers to use those services. An excellent example is cross-border remittances.
Mobile Money, on the other hand, started moving at lightning speed to offer similar services. It is also now extending its service portfolio to include banking services, payment services, e-commerce services, online services, and mobile services.
MMT players have also solved the problem of the 8X5 service window and taken it to the 24 X 7 X 365 model, where there is no more queuing up for bill payments such as electricity, water, or any other utility, or even the purchase of all types of tickets, etc.
Subscribers and customers want value, convenience, and ease in their lives, and if you offer those ingredients, people will taste them, and if they like them, they will continue and will be ready to pay an extra fee. Anyway, this article is focused only on basic mobile money or real mobile money functions to drive financial inclusion. Add-on services will be discussed in subsequent articles.
Key Stakeholders in Mobile Money Game
The payment sector is currently undergoing a significant transformation as a result of the emergence of digital payment technologies. This transformation is being greatly facilitated for mobile money, which is now a leading force with the help of advanced technology such as data science and machine learning. The current transformation is leading to beneficial growth for emerging digital economies.
As mentioned below, mobile money was essentially designed for domestic remittances (for migrants from the village to the city to send money home in a safe and secure way), which is also known as send money to peer or peer to peer send money, and “cash in and cash out,” so lots of emotions went into this and this became an emotional money service.
Family members back home feel good, smile, and relax whenever they see money come in on a mobile device. It is critical and absolutely necessary to understand the real benefits & potential of mobile money. Key questions to put here are
- What actually is mobile money?
- What it has to offer?
- Who are the real stakeholders or targets?
- Who should use and get the most out of it?
The adoption of the existing system by new technologies like artificial intelligence, 4G (5G and 6G are not very far away though), quantum computing, and big data analytics indicate that we still have a long way to go to become a 100% cashless society. Get up, spread your wings, and grab as much sky (I guess there is no more land left) as you can. These are policies from Ministries of Innovation, and MNOs are the best admirers and advantage takers. Sadly for the majority of the banks, this is still an unknown path, and some don’t find or consider it a preferred route.
Conclusion – On the sinking Titanic, somebody said on the upper side, “If we are sinking, why are we hundreds of feet above water?” That somebody can be a bank in today’s fintech industry Opportunities are countless; whoever seizes them first gets the upper hand. Thanks to regulation and central bank support through the Ministry of Innovation,
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Banks now, On the sinking Titanic, somebody said on the upper side, “If we are sinking, why are we hundreds of feet above water?” That somebody can be a bank in today’s fintech industry Opportunities are countless; whoever seizes them first gets the upper hand. Thanks to regulation and central bank support through the Ministry of Innovation,
This is a game changer for Africa. Financial inclusion is no longer a dream
[…] Click here to read part-2 […]