Mobile Money – This is the 2nd part, 1st chapter, of a 5-chapter story or book on mobile financial services and security on the same. The first part is available at this link: Mobile Money Basics Part 1. This part focuses a little more on Mobile Money basics and the opportunities that come out of this service, as well as those opportunities that got added under the Mobile Financial Services umbrella as an independent serviceMobile money, mobile payments, mobile banking, and mobile commerce can be termed “mobile financial services.

The magic word 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 in 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 anymore. Transaction data can be used to develop customers’ credit histories and offer other top-up services.

Introduction – Mobile Money Basics


Yesterday, I was reading on the internet. Around 2 billion people don’t use formal financial services, and more than 50% of adults in the poorest households are 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.

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 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.

Main Story

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).

Agent distribution is not an easy job, and lots of smart work and extra time need to be put in. Plotting agents strategically on city and rural area maps is very important, as we all know domestic remittance happens from cities to villages, and if I, as a 70-year-old man, can’t find an agent to withdraw (in my village) my son’s hard-earned money sent to me as a gift or in my need, then everything is useless. In short, the whole model of the mobile money system and its benefits just collapsed. Below are a few pointers on this:

  • In the initial days, mobile money was targeted for domestic remittances from cities to villages.
  • Availability of agents to withdraw cash, take cash deposits, and provide other services to subscribers
  • Building a Savings Culture
  • The success of mobile money heavily depends on accessibility, availability, and addressability.
  • The agent is the primary access channel for mobile money as it conducts agent-centered transactions like registrations, cash-in, and cash-out transactions.
  • Agents trade mobile money for a commission.
  • They also act as the first point of contact for subscribers, and it is prudent for a mobile money operator to invest in agent education.
  • “If it’s difficult for you or your organization, or you can’t or aren’t planning to setup a Mobile Money Agent network with the correct distribution model, then it’s very easy to forget about Mobile Money’s successful business or setup”. 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 or country map are also crucial.

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 one small mosquito, but through life experience, 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 is 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 have 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.


Mobile money has moved beyond philosophy and knowledge sharing with banks and MNOs. Today’s innovators are aggressively targeting the intersection between areas of high frustration 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 through the channels they build, and also offering instructions on how to build value propositions that really persuade mass market customers to use those services. An excellent example is cross-border remittances, for which banks have traditionally charged very high fees and offered a pathetic, poor, and snail-speed service, with transfers often taking up to three to seven days to arrive at their destination.


After 2 to 3 years after its inception, mobile money started moving at lightning speed to offer and extend its service portfolio to include banking services, payment services, commerce or e-commerce services, brought online or internet banking services to mobile, solved the problem of the 8X5 service window, and took it to a 24 X 7 X 365 model where there was no more queuing up for bill payments such as electricity, water, or any other utility, 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.

What actually is mobile money? What does it have to offer? Who are the real stakeholders or targets? Who should use it and get the most out of it? It is critical and absolutely necessary to understand the real value, benefits, and potential of mobile money. 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, 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. Mobile penetration reached the 100% mark in most of the countries, and in some, it was even greater than 100%. This also contributed to real success, as mobile phones also have an emotional touch, and when they started delivering money, they went all the way up on the emotional meter.

How Mobile Money improves 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 accessibility of services and a wide agent network in both cities and rural areas is 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 advanced to ensure the user experience is seamless and easy by adding many access interfaces and channels (USSD and SMS still remain on top), some of which got reused (NFC, mobile apps, APIs, etc.) in mobile banking, mobile payments, and mobile commerce to support e-commerce and mobile trading. The mobile device has become a part of the system and cannot be excluded anymore.

Mobile phone financial services present new consumer protection challenges, i.e., large distances between providers and customers. Agents may lack clear incentives or liability for transparency. Cash-in and cash-out functions 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

Conclusion –
On sinking the Titanic Somebody said on the upper side, “If we are sinking, why are we hundreds of feet above water?” That somebody can be a banker 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,

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. Security, regulation, and compliance should always be at the forefront of a fintech manager’s mind, and he or she should also understand the integration of the same throughout the development life cycle. Mobile money is supposed to improve life for the lower segment of society, and the main objective is financial inclusion.

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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. So true and in fully in agreement. The concept of mobile money has transcended the realm of philosophical discourse and informative talk shows. Thanks for sharing this.


  2. This is a game changer for Africa


  3. […] Click here to read part-2 […]


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