In this era of speedy digitalization, sending and receiving money online has become more convenient, useful, and accessible to a wider range of people around the world. Now, it is possible to send money to anyone in any part of the world or carry out business transactions with just one click. There are various reasons for the steep growth rate, burgeoning user base, and high profitability of mobile money sprinters.
Unfair margins and multiple transactional fees charged by several economic institutions can now be replaced with a single swipe on your smartphone, completed without any fee. You can even conduct daily transactions online, like bill payments, grocery shopping, automated payments for entertainment apps, etc. You don’t need to visit the bank location anymore to acquire a wide range of payment and delivery options.
Mobile money transfers do not always require even a bank account. The World Bank has reported that 1.4 billion adults do not have a smartphone due to various reasons like illiteracy, low income, living in remote or rural areas, etc. Due to these reasons, it is very convenient to use mobile money sprinters. They enable you to carry out any transactions without even having a bank account. In this article, we will give you in-depth knowledge about mobile bank accounts, how to use them, and their effects on countries like Pakistan, Somaliland, and Zimbabwe. Keep Reading.
What is Mobile Money?
Mobile Money is a great way to transfer money online to anyone around the world with just one swipe on your smartphone. It is not mandatory to have a bank account to transfer money, you can simply transfer money to your bank account wallet that can be later used for online purchases. There are billions of people worldwide who do not have a bank account, it is a great option for such people to carry out their daily transactions without any hurdles.
These kinds of mobile money apps can be used for all types of transactions that were traditionally carried out in banks. Now the number of users has skyrocketed for mobile money users with 270 mobile money services available all around the world.
Mobile Money Features
In countries that do not have enough banking and other financial services, Mobile Money banking provides a great option to carry out daily transactions. Mobile money banking had a worldwide impact though it is new and still in a developing state. Mentioned below are some of the features that have made Mobile banking very popular:
One of the greatest benefits of mobile money is that it can help millions of people who are unable to open their own bank accounts to carry out daily transactions. You do not need to physically visit the bank or live beside the bank or present any information to make daily payments and transfers.
Research had shown that people living in extreme conditions, anywhere in the world possess a basic cell phone, and that is all required to access the mobile money service. It is reported that there are more than 16 billion mobile phone users and the number is expected to rise with more digitalization. This can help to break various systematic barriers like literacy, poor income or even living in remote areas.
It is an incredibly easy-to-use service. If you have a basic sense of sending text messages, you can also send money and carry on with your transactions. All you need to do is simply provide the contact number of the person to whom you want to transfer and then send money as you wish seating anywhere anytime.
Mobile Money services are very safe to use, though they are prone to hacking and there are wide ranges of systems and firewalls to protect your money from hacking. Still, it is a great option as you do not need to carry any large amount of money anywhere to do your payments, you can just simply do all your transactions with just one click.
How Does Mobile Money Work?
To use these kinds of Mobile Money, you don’t need to have a bank account, you can link your mobile number with your mobile wallet, so it is not mandatory to own a bank account or a smartphone to carry out your basic transactions. Mobile money can be used in a number of ways, like accelerating financial inclusion with new data, paying daily or monthly bills online, paying local shops online, etc., if you simply save your money in your savings account. Mobile Money is way cheaper than other bank transactions as no fee is charged to carry out any transaction, and you can make unlimited payments without paying a single penny.
Effect of Mobile Money in Pakistan, Somaliland, and Zimbabwe
Telecom ZAAD (Somaliland):
- It was considered a great victory; within one year of the service, they recorded 70 percent of active users, and they had an average transaction of 30 per month.
- It was started when one of the senior officers of Telesom visited Kenya and Tanzania to learn about financial diaries revealed about M Pesa use; he had the vision to continue the same service in Somaliland.
- It all started when the company started to pay its employees by using the same platform. It sent a quite powerful message to all the companies to take up these options to pay salaries to their employees.
- After that, Telesom reported many customers have been using ZAAD to carry out their daily transactions. ZAAD was established as an effective cash replacement tool at that time.
- Easypaisa had great success within 11 months of the establishment of the company as it was reported that 5 million transactions were made by the end of 2012 with a volume of $1.4 billion.
- It was created by MNO Telenor Pakistan and Tameer bank. They faced steep obstacles due to increased registration fees for their own Know-Your-Customer (KYC) procedures.
- By keeping all these in mind, Easypaisa was set up as an OTC (Over-The-customer) service, to enable online transactions and bill payments. Here, every transaction was carried out by the agent and was totally free of cost.
- For efficient transactions, customers need to provide their ID and the money that needed to be transferred, other than that nothing was required and the agent would look after all other requirements.
- Easypaisa steadily moved its model towards mobile wallet products, because OTC survice had very limited products to offer.
- Now, Easypaisa has been recorded as one of the biggest money-transferring wallet services with daily bill payments and even insurance services through Easypaisa Kushal.
- Ecocash was launched in 2011 by Econet Wireless, having 70 percent market share in Zimbabwe. 18 months after launching Ecocash, it had more than 2.3 million users and over 1 million active users with an average monthly transaction of $200 million.
- Though the platform was mostly based on Person-to-Person payments, they had the vision to capture daily market transactions starting from bill payments to buying things online.
- They were able to bridge the gap between all the financial hurdles, like banana skins reports revealing overindebtedness, of replacing money and starting an online transaction. They successfully addressed the concerns, and now they are not only focused on Person-to-Person services but also act as the network of various mobile payments on day to day basis.
What are Some Mobile Money Services?
M-Pesa has been one of the dominant and popular mobile money services in Africa more particularly in Kenya. It has seen steep growth in users after its launch in 2007. It has been observed that more than 50 million users make use of Mobile money services with an average of $314 billion of average transactions annually. It is one of the most successful and popular Mobile money providers.
Airtel Africa is a significant mobile money provider in Central, East, and West Africa, comparable to M-Pesa. Millions of users in more than a dozen African nations, including Nigeria, Ghana, and Kenya, can now access mobile money through this part of the Telco Bharti Airtel Limited.
One of the most popular e-wallets in Columbia is DaviPlata. To make it simple for Columbians to send money abroad and withdraw cash without having a bank account, Banco Davivienda developed the free DaviPlata app.
In order to give underfunded and underpublicized Filipinos a simple approach to digital accounts, instant payments, and repatriation transfers, Globe Telecom developed GCash. There are around 55 million GCash accounts in the Philippines, according to the company’s registration with the Bangko Sentral ng Pilipinas.
Ways to Use Mobile Money
Mobile Money has a variety of uses in daily life transactions. It is a great way to carry out daily transactions for people who do not have their own bank accounts.
Many of these mobile money apps help you to pay off small microloans that are given to various borrowers, small business communities, and other developing reasons. These microloans are given in order to boost economic growth and other entrepreneurial activities. Mobile money services provide direct transactions to pay off these loans.
Mobile Money services are great to carry out shopping for daily needs in retail stores or e-commerce sites. It helps in cashless payments and helps you save tons of money on fuel, food, etc., and of course, time. Some of the e-commerce websites even offer several cashback and discounts for online transactions.
Managing Business Funds
Many entrepreneurs now prefers mobile money services for smooth cash flow and safety protocols. These kinds of mobile banking services offer flexibility and provide building trust and growing digital financial services with a secure platform that helps in safer transactions.
Many users who do not have their own bank account use Mobile Money apps as a savings account to save emergency funds. They save their money in mobile wallets and use them during crises.
Is it Safe to Use Mobile Money?
Mobile Money services are safe to use, just like any other traditional bank account. The money in mobile money is protected by various bank regulations. It is not easy to scam these kinds of services by fraudsters or scammers as the providers make sure to check the identification of their users or customers.
The mobile money transactions are performed in a very controlled manner as all the transactions and account balances are stored for future records. You don’t need to worry if you lost your sim card or it gets stolen because your funds are always kept safe. Other than that, for each payment, you will get your own Secret unique PIN number to carry on with the transaction.
Risks Associated with Mobile Money
- Customers must get approval from reputable banks in order to comply.
- The absence of network compatibility limits outreach and renders transactions difficult.
- Mobile money adoption typically needs collaboration between multiple parties. For the mobile money platform to be successful, there must be confidence between these parties.
- To ensure widespread acceptance of the system, the level of illiteracy and ignorance among the populace must be decreased.
- Installing the app is necessary, however not all mobile phones have it. For this, a cellphone is required.
- Passwords and other information should never be given to anyone. Failure to comply will result in fraud and theft.
Q1. What are the challenges faced by mobile money operators?
Identity fraud, verification, hacking, malvertising, exchanging personal identification numbers (PINs), and agent-driven fraud are some of the safety and security issues with financial technology-enabled transactions like Mobile Money.
Q2. What is the concept of mobile money?
As the primary class of digital wallet, a mobile payment, also known as mobile money, mobile money transfer, and mobile wallet is any of the many payment processing services carried out from or via a mobile device and governed by financial regulations.
Q3. How does mobile money save lives?
By simplifying accessibility to remittances from relatives and close friends, savings, and government payments that can help to pay for preventative care and emergency medical bills, online banking services like mobile money can lessen vulnerability to health shocks. Mobile money allows users to deposit, receive, and transfer funds using their phones without a bank account, on the one hand. Through a network of licensed agents, telecommunications firms and finance companies offer mobile money services.
Q4. What are the effects of mobile money transfers?
With its impact on broad money and the availability of private-sector credit, mobile money may have an impact on interest rates. In response, monetary authorities may pursue tight monetary policies that result in high-interest rates if mobile money increases money demand and inflation.
Mobile banking features are intended to benefit clients in a wide range of ways, which might have a significant impact on the digital economy. Customers now have more control over their funds, for instance, thanks to 24/7 account access and the option to make purchases online without going to a local bank.
Mobile money is a very convenient and useful tool to transfer money anywhere around the world with just a single click. It is a great advantage for any individual who does not have their own bank account, as you can just link your phone number with your e-wallet and carry out daily transactions. You can pay your bills and even shop from any e-commerce site. There scarcity why having too little means so much book provides powerful insights into money management and the money mindset.
This is a nice way to save money as you can treat it as your savings wallet. You just need a cell phone to carry out your daily transactions. Despite being equipped with these advantages, there are certain risks, like scams, hacking, fraud, identity theft, etc. However, such incidents are rare, and digital wallets are protected with high levels of security. Therefore, without further skepticism, start your transactions with Mobile Money.
- Jonas Taylor is a financial expert and experienced writer with a focus on finance news, accounting software, and related topics. He has a talent for explaining complex financial concepts in an accessible way and has published high-quality content in various publications. He is dedicated to delivering valuable information to readers, staying up-to-date with financial news and trends, and sharing his expertise with others.