Mobile Money Services – The emergence of mobile money services in Africa has proven the fact Banking is important and needed as compared to banks. African are much happy to have their banking needs fulfilled through non-bank institutions. So in shorts “Banks, you can stay where ever you are.” The entire success of mobile money services is based on multiple factors and not just technology. We can comfortably say technology contributed 30% as its share and rest 70% goes to strategy, business, how the product gets positioned or marketed, regulation, environment and support from governments.

Anyone looking for some basic knowledge or introduction on mobile money and its critical attributes/ key stakeholders along with meaning then this article can help but only on high-level. This is the 1st part 1st chapter of a 5 chapters story on Mobile Financial Services and its security. Click here to read part-2


Some Background

This post is an attempt to make it useful for readers who are interested to know some high-level basic information on the subject of Mobile Money or Mobile Payments environments. Experts in any form of payments like Mobile Money, mobile payments, Internet payments, paper or card payments may find this article at a too basic level but that’s the real idea here. Mobile money and Artificial intelligence are two subjects everyone is talking about.


Mobile money business is the best live example of reinforcing the correct, adequate level of maturity, strategy and understanding which can help in building the best of the business models with the least technology support. Though technology cannot be eliminated at all. The operationally integrated organisations with vision, passion, governance structures and discipline can do wonders with correct skill sets. Mobile Money is one of the best examples of this. When mobile money has big data, data science, artificial intelligence kind of emerging technologies and jargon at its foundation level then this game becomes too much interesting.

The idea here to share some basic and collective out of all those millions of papers and article available on the internet. Because Mobile phone penetration is soaring and creating huge potential for expanding financial access at a lower cost than through brick-and-mortar branches. We will keep AI & blockchain discussion with mobile money out of this though.


Mobile Money – Basics

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 image14to 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, microloans 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.

Click here to read part-2


Some Key Points for Mobile Money

  1. Mobile Money Services essentially was for unbanked & underprivileged customers.
  2. Mobile Money suppose to improves life for the Lower segment of society by
    1. Domestic Remittance from cities to villages
    2. Availability of Agents to withdraw cash
    3. Building Savings Culture
  3. Acceptability of Mobile Money under Mobile Financial Services was the biggest breakthrough
  4. How Mobile Money Improve the life of Lower segment of society
    1. Mobile money is mostly used for domestic remittances. Remittance transactions are usually from cities to villages. They emanate from the need for the working class to take care of the kinsmen in the rural areas. International remittances are also taking a good share of this pie
    2. Mobile money thrives on the accessibility of services and a wide agent network in both cities and rural areas are required
    3. Savings clubs have been a recent add on to mobile money services and this has assisted club members to save up in an easy and electronic way outside the banking system
  5. Acceptability of Mobile Money
    1. Over the years, the acceptability of mobile money as payment media has improved with most economies embarking on a cashless society drive to reduce dependence on a paper currency
    2. Most vendors, retailers and transport operators accept mobile payment as an alternative to cash due to its elimination of cash handling expenses and risks
    3. The introduction of NFC driven payments has revolutionised the market for micropayment


Mobile Money & Africa

Africa is the land/Home of Mobile Money and Mobile is the most frequently used and widely acceptable technological device than any other. Financial services are the key needs of most people due to almost zero banking penetration. It makes sense to enable Mobile devices as a set of financial tools and features; because mobile handset penetration is more than 10 to 15 times higher than banking. Finance sector can take advantages of Mobile devices to penetrate all classes of society so the birth of Mobile Money.

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.


How about Security & Privacy

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. 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.

 To demonstrate issues around Privacy, Innovations, and Security in Digital Payments. One point agenda was to highlight the need to accelerate the development of privacy & 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.

Artificial Intelligence and DataScience are getting there with a lot of attention. AI fighting cybersecurity in the area of payments. DataScience buddies like machine learning and deep learning are getting richer and extending its arms to support a more secure and safe environment with lots of ease.


Where World is Moving for Digital Payments

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 a coin to another side.

To achieve 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 personally like this statement as this is the only way where we can zero in the difference between being data-informed and data-driven.

In developing countries, mobile money solutions have been deployed as a means of extending financial services to the community known as the “unbanked” or “underbanked,” which is estimated to be as much as 50% of the world’s adult population.


Role of Agent – Mobile Money Business

Agents trade mobile money for a commission. Mobile money refers to Payment Services operated under financial regulation and performed from or via a mobile device. Instead of paying with cash, cheque, or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods.

Role of the agent in the mobile money game is crucial and critical for the success of service. Subscriber should get assistance almost at their doorstep. Some of the key points for agents are –

  • Who can be an agent of mobile money
    • Agent qualification criterion is defined by the operator after considering the requirements of the regulator
    • Individuals and companies can qualify to be agents and they have to meet the required KYC requirements
    • The operator’s agent officers are responsible for recruiting and managing relations with the agents.
    • The density of agents has to be predefined by the operator to maintain the profitability of agents as well as accessibility to subscribers.
  • Role & Importance of Agents
    • The agent is the primary access channel for mobile money as the conducting agent centred transaction like registrations, cash in and cash out transactions
    • The success of mobile money heavily depends on accessibility
    • They also act as the first contact for subscribers and it is prudent for a mobile money operator to invest in agent education.

Who can be an agent, how agent distribution needs to be plotted on the city/country map is also very very critical. We believe embedding these core elements in the proposition, operating and delivery models will enable players to ‘play to win’ in these turbulent times.


Banking – FinTech and Banks

It was taken for granted that Banking (beautiful and useful phenomena) and Bank (long long ago; a big building use to employ lots of people and consume too much space, money, power, and IT machines but use to works very slow and for very limited time of day and weeks) are very tightly coupled and married forever.

MNO and few other companies (Later known as Mobile Financial Service Providers) saw the difference and jumped in between banking and bank and successfully got them divorce or at-least manage to find their relationship with banking.

Unfortunately, most bankers are still not convinced that these scenarios will play out. These bankers are hoping that their retirements hit before they have to make a decision. The board of directors of a lot of community banks feel that they are the pillar of the community and the relationship will continue to be the answer. Bankers must face facts and learn what is going on outside of their four walls. They may wake up too late.

To further discussions on how to play the ‘new normal’, we analysed the activities of a range of players and have unearthed ‘8 core traits’ of likely winners. We believe embedding these core elements in the proposition, operating and delivery models will enable players to ‘play to win’ in these turbulent times.


Points to Note:

All credits if any remains on the original contributor only. We have covered all basics around mobile money systems and the importance of quality financial services data. 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.
  • 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. Will try best to answer it.


Sign-tConclusion: Expanding financial access to the unbanked by Offering convenient and real-time transactions, Dramatically reducing transaction costs, Microfinance Loans and Domestic Remittances, Expanding points of access thus reaching remote areas and Lessening the need to carry cash creating secured & safe way to transact.

There is no dull day in Payments business these days. The unglamorous world of clearing and settlement is a recipient of generous attention due to 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’.


Hash Tagas : #Mobilemoney_basics  #mobilepayments  #mobilemoney  #payments #agents

============================ About the Author ===============================

Read about Author  at : About Me   

Thank you all, for spending your time reading this post. Please share your feedback / comments / critics / agreements or disagreement.  Remark for more details about posts, subjects and relevance please read the disclaimer.

FacebookPage      Twitter     ContactMe    LinkedinPage    ===========================================================================

Posted by V Sharma

Technology specialist in Financial Technology(FinTech), Photography, Artificial Intelligence. Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Mobile Payments), Data Science, IT Service Management, Machine Learning, Neural Networks and Deep Learning techniques. Mobile Data and Billing & Prepaid Charging Services (IN, OCS & CVBS) with over 15 years experience. Led start ups & new business units successfully at local and international levels with Hands-on Engineering & Business Strategy.


  1. […] its critical success factors, attributes, key stake holders along with meaning were discussed in Mobile Money Basics(updated on 21-Dec-2014). Idea here to highlight key difference or depict differentiate between […]



  2. […] story/book on Mobile Financial Services and security on same. 1st Part is available on this link Mobile Money Basics Part-1. This part focuses on little more on Mobile Money basics and the opportunities which come out of […]



Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s