Mobile Money vs Mobile Banking – Mobile Money was created initially for the purpose of increasing the financial inclusion for the people who were before financially excluded. While Mobile Banking was meant solely for banked customers. Introduction on mobile money, attributes, key stakeholders and its critical success factors are defined in Mobile Money Basics (updated on 21-Dec-2014).

Users – Mobile Financial Services – Who should read this

The user of mobile phones always finds easy to use devices for making payments, sending & receive money (P2P) or checking the balance. The key question often being asked “E-Money – Mobile Money – Mobile Banking – What’s the Difference?”

Confusion among future users and existing users still prevail around the question as state above. As there are no universally accepted/defined definitions. This lack of uniformity and become critical at the regulatory level as well. As and when potential players are trying to have a meaningful conversation with each other; we see blank faces.

Mobile money transfer is simply a movement of electronic value that is made from one mobile wallet to another wallet. In simple terms its transfer of some numbers in form of bits and bytes rather then the tangible physical item in traditional money exchanging hands. P2P transfers accrue to a mobile wallet, and/or is initiated using a mobile phone. Mobile Money was designed for peer-to-peer money transfer, Cashin and CashOut i.e P2P payment system as the original idea.

Since then it has gone much beyond the basic idea. In today’s time, it helps utility bill payments, Airtime topup credit & buying with the upfront cost. Micro-savings, Microloans and Micro Insurance etc forms Mobile Payments ecosystem are also getting in here.

Mobile Financial Services Product Suit

These all products are based on credit rating which comes out of the algorithm of machine learning techniques and helps to narrow down the losses or clearly find the defaulters.


Mobile Money Transfer means person-to-person money transfers and when it refers to person-to-business payments that are made with a mobile phone called as mobile payment.

Calling a process or ability to carry out financial service transactions e.g money transfer, pay bills, make payments, airtime purchases and more via mobile phone without necessarily having a bank account as Mobile Money is not entirely true.

The Government Role, Regulation, National Payment System, Customer Protection Framework plays an important role in the ecosystem. Data science with its best product called as Big Data is really helpful here.

Mobile Money and Mobile Banking

Both of them are viewed under the same umbrella and are now encapsulated in a financial world which is either too complicated or is viewed as complicated. 

Mobile money requires phone number as account number while Mobile banking requires bank account number as primary transaction identity. As far as Mobile Money and Mobile Banking are concerned, in terms of technology, there is no rocket science in both services but surely new technologies like artificial intelligence and machine learning are making it complex and deep learning takes it to different level anyways. Major issues are found in business rules, business requirements, distribution channels and regulatory requirements.

Africa is the land/Home of Mobile Money and Mobile is most often used and widely acceptable technological device than any other even better, larger(percentage wise) and quicker the Blockchain adoption. Blockchain, on the other hand, can help and turn this FinTech upside down for betterment.

Again calling a process an ability to use your bank account via Mobile phone through a linked bank account number or card(virtual or physical card) although also through a Mobile banking platform as Mobile Banking is also not true in its full capacity.\

Differentiation between Mobile Money & Mobile Banking.

To depict the differentiation between Mobile Money & Mobile Banking is even simple. Banking, financial transaction or any payment / real money involvement i.e exchange of money either at P2P, B2B, C2B or B2C level first few things is to check are a risk, security and privacy as correctly said by someone Risk is for Real if not Artificial Intelligence i.e Fintech’s innovation partner/helper.

Mobile Money account or mobile wallet holders may or may not (mostly not) have any access to bank accounts or mobile banking. Mobile banking users use or access their bank accounts through mobile handsets. its.

Mobile Money was created initially for the purpose of increasing the financial inclusion for the people who were before financially excluded. Banks and customer both were running/shying away from each other due to the various reasons.

Mobile money has good success stories with huge financial numbers in some markets but in many markets; mobile money service providers eagerly struggling to dominate the mobile money market, a country with the highest number of mobile phone users in Africa is the example (Nigeria).

A huge percentage of people do not acknowledge that Mobile  Money & Mobile bankings are two different service offerings and completely separate businesses. Mobile Money normally focuses on unbanked, to give financial inclusion for lower segment who can’t afford banks or been excluded by banks as per their KYC or other business rules. Mobile money also allows users to do similar transactions like mobile banking with a mobile phone but in this case, the focus is basically on making mobile payments from an account that doesn’t have to be a normal bank account.

Mobile Money – Money on Wallet

In the case of mobile money, a mobile phone is linked to a cash pool that has been pre-funded and then would be able to make payments for goods and services like what m-banking offered but without necessarily accessing full banking service.

Global Money

Low-end customers where margins are very low, transaction values are low but the high volumes can suffice to bring profitability for operators. Mobile Money wallet that is stored on a phone, heard of concept BaaS over BaaP (Banking as a Service on Banking as a Platform service)

Consumers want the ability to communicate with their banks and buy products via whichever channel is most convenient to them at the time. Consumer and deposit protection, competition and interoperability, consumer protection and innovation, consumer protection regulation, rules of the game, consumer rights and consumer protection law are key critical factors.

Mobile banking and Mobile money may seem a bit confusing to most of the financial services users and it would be helpful if people were more educated on the difference between the two. M-banking or mobile banking is a service which allows a user to use a bank account using the mobile phone via GSM channels i.e SMS or USSD or internet/Data channels i.e NFC or Mobile APP etc.


Security of your Money and Personal Data

Basic security gets covered here, as with linking a registered mobile number to a customer’s bank account, a bank customer would be able to do basic operations using his or her mobile phone, such as topping up airtime, transferring money, checking his account balance, paying bills, and making special requests to his bank.

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Machine learning algorithms work well here because there is not much change in the behaviour of transaction trends, and any small anomaly can be picked up quickly and easily. Today, customers expect an outstanding digital experience, preferably omni-channel and personalized to them.

Mobile Money, or mWallet, is a data repository that houses consumer data enough to ease a financial transaction from a mobile device and the applicable intelligence to translate an instruction from a consumer through a mobile device into a message that a financial institution can use to debit or credit bank accounts or payment instruments. The money sits in the MNO network on the mobile money wallet (let’s keep the money wallet and mobile money wallet separate for now).

In summary, below is Mobile Money’s face. A mobile money account can be opened within a few minutes from one’s mobile phone without necessarily visiting a bank or paying the first deposit, but for m-banking, one would have to open a formal account and provide other documents as well as the first funding. Banking as a Service (BaaS) on a Banking as a Platform (BaaP) is causing huge disruption here. When we add a simulation of artificial intelligence and machine learning, it gets better and better.

The wave of Electronic / Digital Money

The global proliferation of money banking and electronic banking has become prevalent. My understanding and strong belief in the phenomenon of “access to basic financial services” (also called “financial inclusion” or “inclusion”) is that it is a basic human right.

  • Mobile Money Services essentially was for unbanked & underprivileged customers
  • Mobile Money suppose to improves life for the Lower segment of society by
    • Domestic Remittance from cities to villages
    • Availability of Agents to withdraw cash
    • Building Savings Culture
  • Acceptability of Mobile Money under Mobile Financial Services was the biggest breakthrough
  • Role of Mobile Money Agent is crucial and very critical for the success of service
  • Who can be an agent, how agent distribution needs to be plotted on city/country map is also very critical

In developing nations, mobile money solutions are being implemented as a strategy to expand financial services to the demography referred to as the “unbanked” or “underbanked,” whose population is believed to comprise approximately 50% of the globe’s adult population.

Mobile Banking

The financial institution allows its customers to conduct financial transactions on their bank account via a mobile device. Mobile banking, also known as M-banking, basically allows a user to run a bank account using their mobile phone.

Digital banking teams at banks are planning and working to transform the customer experience later this year with their chat-driven intelligent virtual assistants (bots).

It would be interesting to see how Banks o will be marrying the latest technologies like deep learning, neural networks, artificial intelligence, payment intelligence, predictive analytics and cognitive messaging to serve their millions of mobile customers.

Even may show a behind-the-scenes glimpse into the technology that’s designed to grow and develop with customers over time. With a registered mobile phone linked to one’s bank account, a banked customer would be able to do basic banking operations using his mobile phone such as topping up airtime, transferring money (P2P), check account balance, pay bills as well as make special requests to the bank. But this is rarely seen in Africa.

Mobile Money  –  Driver of Financial Inclusion in Sub-Saharan Africa

Africa is heaven for Mobile Money because banking penetration is less than 5% while in Asia, through countries like Indonesia, Singapore, India and many more, Mobile Money services can never fly or if I can say never be a success; chances are almost zero due to the high level of financial inclusion, availability of ATMs and the rife of Agency Banking.

When Africa delivers on its potential in terms of Mobile Money blended with artificial intelligence, payment intelligence and info-security intelligence then, the winners will be those operators who have been ready to live with the risks involved in the business.

Unless we talk about value-added services on top of the banking, Mobile Banking and Mobile Money basics remains the same as in mainstream banking (Debit or Credit), nothing beyond. Banks are losing out to Mobile Money services due to their failure to compete with MNOs/MVNOs and scepticism to open up their Mobile Banking services to run side by side with Mobile Money. Mobile payments are being adopted all over the world in different ways.

In 2008, the combined market for all types of mobile payments was projected to reach more than $600B globally by 2013. Mobile money came into light or got into existence only because mobile banking or bankers were running away from the fact that there is serious need to cover the excluded segment which was in a couple of billion people. Couple of billion never seen or experience the taste of how financial services work and only after financial inclusion went as a key driver.

Blending MFS with Emerging Technologies

AI & Data Science subsets should also be looked at while designing our latest and modern FinTech systems for MFS. This will cut cost and deliver high-speed.

Mobile Banking vs Mobile Money

These emerging technologies will not only cut cost but will also deliver the double-figure revenue numbers.

The mobile payments market for goods and services, excluding contactless transactions or NFC transactions and money transfers, is expected to exceed $300B globally by 2023.

Mobile money, therefore, presents great opportunities for MNOs/MVNOs and FinTech’s operating in markets where mobile penetration is rising and financial inclusion is low. Such markets show high service acceptance levels, as the freedom to conduct financial transactions on a 24/7 basis is highly appealing to the population.

As it develops, each market will need to understand customers’ demands and develop its own ecosystem and business models. A key facilitator will be converging regulation and legislation which needs to discuss fraud and money laundering issues. A favourable platform for industry stakeholders to collaborate will be one that maximizes the benefits to all parties.


The Target Markets

More than a billion people in emerging and developing markets have cell phones but no bank accounts. Many low-income people store and transfer money using informal networks, but these have high transaction costs and are prone to theft. Mobile money is beginning to fill this gap by offering financial services over mobile phones, from simple person-to-person transfers to more complex banking services.

To date, there have been more than 100 mobile-money deployments in emerging markets; at least 84 of them originated in the past three years. In a rapidly changing environment, telecommunications operators are facing the challenges of growth, operational efficiency, convergence, technology and increasing regulatory pressures. Banks are any way exploring chatbots, personal assistants, robot-advisors, machine learning and cognitive computing to tackle their biggest rival FinTech.

When addressing the opportunities of mobile money in today’s rapidly changing environment, telecommunications operators, financial institutions and technology providers face the challenges of strategy design and modelling, operational efficiency, management of partnerships, risk, compliance and regulatory complexity. Electronic money is the electronic alternative to hard cash which is in the form of bits and bytes of electronic data. Or in short concept/virtual form our tangible item i.e physical paper/coin cash.

Mobile Money Services Development

Electronic monetary values are/can be used for making payment transactions or sending to another person in the form of settlement or payments or more specific electronic value products and services. Most of the FinTech today use AI to model scenarios for capital planning or use natural language processing and graph processing techniques to flag transactions for compliance reviews.

To help our clients address those challenges, Ernst & Young brings together a worldwide team of professionals with deep experience in providing assurance, tax, transaction and advisory services. The world is now moving from plastic to mobile phone for payments that also means all the work done in last 20-30 years is now getting scrapped and we are back to basics and shifting our mindset from one side of the coin to another side. To make a faster and quick win here we should adopt the philosophy of  Harvey Mackay where he said “To me, job titles don’t matter.

Everyone is in sales. It’s the only way we stay in business”. I like this statement as this is the only way where we can zero in the difference between being data-informed and data-driven. These uses are lower profile, but they’ll have a big impact due to Big Data techniques as they move toward the mainstream.

For people who are economically challenged,/ underprivileged people face these agonising choices is not just that they don’t have enough assets. They also don’t have access to a bank to help them use their assets effectively. If their savings are in the form of jewellery or livestock, such as they can’t very well chip off tiny pieces to cover routine daily expenses and mobile money can help them to improve their lives and living lifestyle to come up from the level they are.

FinTech – Friend for Mobile Financial Services

FinTechs will evolve more from digitization and automation in very short and will bring a number of changes in less 10 years what banks are unable to bring in the last 100 years. Mobile Money is such a great tool but its full potential is still not known to most the world. Though there is a lot going on by MNO’s, MFS Companies and foundation entities, they are doing a commendable and excellent job.

Banks as “Mobile Banking providers” and FinTechs as “Mobile Money Providers” are creating business models on how customers might react to various services & experience scenarios and testing assumptions on users’ digital twins. Transaction values are low in mobile money but the volume always suffices the need of total value processing. The total volume of transactions is much higher compared to many banks combined in many mobile money services providers cases.

Banks are now making the best of AI as emerging technology bundle and blockchain for more robust and stronger use cases. Most of the bank now has AI based machines for customer interactions (Chat bots), the machine’ making use of the neural network for signature authentication, image recognition, handling fraudulent transactions and even making specific strategic decisions as well. There are some vital questions which need to answer by everyone in the said business as below. These questions are already getting real attention to close the gap between hype and reality already.

  1. Which route to go as the crux of this discussion?
  2. What are your views on the same?
  3. What are the implications of this war?
  4. Are these developments going to change the world (unlikely)?
  5. Will these developments will bring any significant “win” or will just a nice hack.

Maybe it will simply serve as a road sign indicating that this path is “UNKNOWN”.

Transformation of Digital Payments

The objective of digital payment is to assess the user-friendliness, trust and the user’s view on the current and the future authentication methods of cashless payments and to understand ideal payment solutions. The economic barriers are also disappearing, though a real more investment in equipment and cards would be needed to let even purchases such soft drinks to be made. But transactional privacy will be at the heart of the government’s attack on digital cash.

Central banks are equally worried by the prospect that e-money may be issued that is not denominated in the national unit of account, like dollar or euro. That could be the rebirth of private currencies and free banking. Merely jumping on the FinTech bandwagon by banks — or even building a successful FinTech company — will not create a successful financial institution.

In mobile payments movement of funds from customer wallet value to merchant/biller mobile wallet. Mobile payment is used for the transfer of e value from a subscriber to a merchant wallet. This happens either at the point of sale (retail) or remotely (bill payments). The mobile wallet is nothing but just an account that is primarily accessed using a mobile phone. I found from internet “Artificial intelligence can help people and business to make faster, better, and cheaper decisions. But the willingness to collaborate with the machine and not just treat it as either a slave or an overlord.”

Points to Note:

All credits if any remains on the original contributor only. We have covered all basics around mobile payment as payment services. The business models and the importance of service quality. In the next upcoming post 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.
  • Interviews with real customers in India, Zimbabwe, Kenya and Indonesia
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.

Feedback & Further Question

Do you have any questions about AI, Machine Learning, FinTech, Data Science or Big Data Analytics? Leave a question in a comment section or ask via email. Will try best to answer it.


Conclusions: Which system is useful and needed for the business considering the market you use and synchronised with your strategies and goals. While mobile payment announcements from various smartphone makers are growing in frequency, still too much unknown & doubtful thoughts that such services will drive much interest in buying the smartphones that support it. Mobile money which is a service in which the mobile phone is used to use financial services.

Mobile money is the key to growing Africa’s banking sector. It is turning Africa’s frontier financial markets into a battle i.e. Mobile financial services in Africa is winning the battle for the customers. Banks and FinTech’s are in a battle to revolutionise financial services in Africa.

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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.


  1. […] To read the full post click here […]


  2. […] solution to the local “money” culture. Vinod Sharma has an interesting take on mobile payments on his blog where he portrays the mobile wallet as nothing more than an account that is primarily accessed […]


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