Mobile Money Basics –  The opportunities which come out of mobile financial services umbrella are Mobile Money, Mobile Payments, Mobile Banking and Mobile Commerce and many more. Digital payments changing the face of the payments industry, with mobile money on the foundation of data science and machine learning there is a complete transformation. This transformation is leading to a desirable growth for new digital economies.

This is part 2, chapter-1 of 5 parts storey/book on mobile financial services. 1st Part is available on this link Mobile Money Basics Part-1. In this post will focus on little more on mobile money basics and the opportunities which come out of these services.


Magic Word – Pay

The magic word is known as “Pay” has gone viral in today’s time and every day we have 1 or 2 new startups entering the payment industry, specifically into the Mobile Payment domain. Mobile phones can be used to deliver a range of banking services.  Not from Banks, I am separating banking and banks. Banking services don’t need banks any more. Transaction data can be used to develop customers’ credit histories to offer other top-up 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 a versatile domain and can support a variety of services, in particular, person-2-person (P2P) money transfers and now very easily crosses the borders without visa requirements (regulations or KYC) including cross border, 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/country map, is also very critical.

The success of the mobile money system relies on a coordinated effort by all to deliver a system that speaks to the needs of the people and where no one is excluded because we are approaching an era where everything will be interconnected and where a smartphone will simplify people’s lives in ways unimaginable.

From a financial inclusion perspective, Mobile Money Services were essentially for unbanked & underprivileged customers but due to unavailability of a Ministry of Innovation as well as strong control from central banks, this got lots of support & attention resulting in rapid growth for those providers who got the principles right though majority of such services failed (No offence to any, just referring to the statistics available across the globe on successful and vanished mobile money deployments).


Agents – Mobile Money’s Strongest Pillar

Agent distribution is not an easy job, it requires lots of smart work and extra time. The needs to put-in, plotting on the map, selecting the right and qualified agents for city and rural area strategically is very important. We all know domestic remittance happens from cities to villages and if I as a 70-year-old man who can’t find an agent to withdraw (in my village) my son’s hard-earned money sent to me in my needy time, then everything is useless for me as a consumer.

  • In the initial days, mobile money was targeted for domestic remittance from cities to villages
  • Availability of agents to withdraw cash, take cash deposit and other services to subscribers
  • Building Savings Culture.
  • The success of mobile money heavily depends on accessibility, availability & addressability
  • The agent is the primary access channel for mobile money as the conducting agent centred transaction like registrations, cash in and cash-out transactions
  • Agents trade mobile money for a commission
  • They also act as the first contact for subscribers and it is prudent for a mobile money operator to invest in agent education
  • If it’s difficult to set up a Mobile Money Agent network for any mobile money business with correct distribution model then it’s very easy to forget about the successful Mobile Money business. Agent float management is also very essential but easy when it’s automated. Empowered agents are motivated agents.
  • Agent selection criteria, as well as agent distribution across a city/country map, is also very crucial.


In short whole model of Mobile Money system and benefits just collapse. Some of the pointers are mentioned on this as above.


Players in Mobile Money & Mobile Payments Domain

Well known and established big brothers in the Mobile Payments space are not bothered by these startups such 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 basic in nature but without clear relevance to the Challenge always gets into closure mode or deep thick mud soup from where 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 to 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 hour of need and other social services), savings for mobile, micro insurance, withdrawals, domestic and international (Cross Borders) remittances are now common services offered by mobile money services providers.


From Myth to Reality

Mobile money has moved beyond philosophy and knowledge sharing talk shows. Today’s innovators are aggressively targeting the intersection between areas of high frustrationSMH for customers and high profitability for occupants, allowing them to gain an optimum level by chipping away at incumbents’ most valuable products.

How to increase access to financial services to drive financial inclusion vehicle through the channels they build, 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,

  • Banks have been charging very high fees for cross-border money transfers
  • The service offering at the same time is extremely poor with the slow speed of execution
  • Fund transfers often taking between 5 to 15 days to arrive at the destination side.

Mobile Money, on the other hand, started moving at lightning speed to offer similar services. Also now extending its service portfolio to include banking services, payment services, e-commerce services, online services to mobile.

MMT players have also solved the problem of 8X5 service window and took it to 24 X 7 X 365 model where no more queuing up for bill payments such as electricity, water or any other utility or even purchase of all type of tickets etc.

Subscribers/customers want value, convenience and ease in their life and if you offer those ingredients people will taste it and if they like 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

It is critical and absolutely necessary to understand the real benefits & potential of mobile money. Key questions to put here are fm

  • 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?

As mentioned before 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, 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 came in on a mobile device.

Mobile penetration reached the 100% mark in most of the countries and in some its even greater than 100%. This also contributed real success as a mobile phone also has an emotional touch and when it started delivering money it went all the way up on the emotional meter.

How Mobile Money improve life for the lower segment of society;

  • 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 their kinsmen in the rural areas. International remittances are also taking a good share of this pie.
  • Mobile money thrives on the accessibility of services and a wide agent network in both cities and rural areas are required.
  • 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.

Over the period of time, technology has been advanced to ensure the user experience is seamless get easy with many access interfaces/channels (USSD & SMS still remains on top) though.


New User Interfaces in Mobile Money / Payments

Some of them got reused (NFC, Mobile App, API’s etc) in mobile banking, mobile payments, mobile commerce to support e-commerce, mobile trading and the mobile device has become a part of the system which cannot be excluded any more. Mobile phone financial services present new consumer protection challenges i.e.

The large distance between providers and customers. Agents may lack clear incentives or liability for transparency, Cash in/out function by agents may open the door to fraud, Requires technology-tailored solutions to data security and privacy, redress mechanisms and pricing transparency. The next article, Part-2 will focus on the specifics of Mobile Banking.

  • Including technology issues in financial education can help reduce information asymmetry
  • Bringing operators under central bank supervision may also help unfamiliar customers feel more at ease

At all times security, regulation & compliance should be on top of FinTech manager’s mind though. He/she also needs to understand the blending of the same in the development life cycle. Mobile Money is supposed to improve life for the lower segment of society and the main objective was financial inclusion.


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.


 On sinking Titanic, Somebody said on the upper side, if we are sinking why are we hundreds of feet above water then. That somebody can be a bank in today’s time of Fintech industry. Opportunities are countless; one who seizes them first gets the upper hand. Thanks to regulation and central bank support through the Ministry of Innovation. The adoption of the existing system by new technologies like artificial intelligence, 4G (5G and 6G are not very far though), quantum computing and big data analytics indicating 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 admirer and advantage takers. Sadly for the majority of the banks, this is still an unknown path and some don’t find or consider this as a preferred route.


 HashTags – #WeTransformLives, #iTransformLives, #MobilePayments

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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. This is a game changer for Africa



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