TOP 9 Mobile Money Advantages!
Advances in mobile technology have opened up new opportunities, not only for communication, but also for using the mobile handset as a platform for a range of applications. The introduction of data transfer facilities and the rise of mobile financial services around the world have allowed mobile money services to evolve and grow rapidly.
The African continent faces challenges in the financial technology space that are diagonally opposite to the situation in the western world. With nearly 80% of adults in Africa not having access to formal or semi-formal banking services, the majority of the continent is still unbanked — at least in the traditional sense.
There’s an enormous appetite for mobile money services from the 2.5 billion people across the world who don’t have a bank account (according to World Bank figures). Thanks to technology advances, falling handset prices and increased competition to serve this market, the potential is exploding.
Now entry-level smartphones cost around 30 US dollars!
And for your money, you’ll get WhatsApp, Google and Facebook, a 3-mega pixel camera and a bunch of other APPs that would have been unthinkable at this price point a few years ago. Once the missing 2.5 billion are online with us, the world is going to look, feel and work in a different way. And the potential for mobile money to do more and do better for people and their communities will never have been greater!
Mobile money — the ability to transfer funds, pay bills, save, borrow and even acquire insurance coverage via mobile phones — is transforming the lives of individuals and small businesses globally. The ability to access funds anywhere, anytime saves time, improves security and provides a means for saving and managing money more effectively than traditional methods.
But it also creates an effect that drives broader economic growth.
Mobile Money revolutionize the developing countries.
1-It makes banking faster and safer
In many emerging economies, more people have mobile phones than have bank accounts. In Bangladesh, for example, more than 75 percent of the population has mobile phones, but only 31 percent have bank accounts. For more than half of rural Kenyans, the nearest bank branch requires at least half an hour of travel time, with the risk of theft along the way. Getting to the bank is expensive, too: about half a day’s average wages for more than a third of rural Kenyans. Mobile money puts the bank branch in your hand.
2-It connects family and friends all over the world
Mobile money allows individuals to send payments to family, friends and business associates. Mobile operators have linked their financial payment services to each other, making it easier to send money between different services.
This is important, because remittances are the biggest source of foreign investment on the African continent while at the same time it still costs more to send money to Africa than to anywhere else. The opportunity for reducing the cost of transferring money into and across Africa is indescribably big and a number of startups are working on this issue from different angles.
Of course, Bitcoin also has the potential to become a major force in the remittance market, with both Banks as well as startups betting heavily on the new technology. African banks are embracing Bitcoin as a way to fend off disruptors while startups are working on the building blocks to make affordable cross-border remittances in Africa a reality and disrupt the banks in the process. At the same time, the general population still doesn’t know much about bitcoin and it is therefore not yet widely adopted, with only 2 physical shops in Kenya accepting it as of today.
3-Reduced contact with officials = reduced potential for corruption
In more and more countries, mobile payments are opening the door to all sorts of payments. Taxes. Licenses. Permits. In countries where corruption is rife, less face-to-face contact with officials means less opportunity for extortion. Which is a win: win for people and their governments.
4-It helps solving problems after natural humanitarian disasters and catastrophes
One relatively unknown benefit of the proliferation of phones, however, has been a reduction in deaths from natural disasters. Mobile technology has improved early warning systems, allowing humanitarian organizations to monitor droughts and other natural disasters, and helping displaced people find shelter and food. This role was solidified in 2015, when more than 100 mobile operators in 75 countries — including almost 30 African nations — signed on to the Humanitarian Connectivity Charter, an initiative to create best practices for responding to humanitarian crises.
It is very useful for African governments, who in the last few years have faced disasters like the Ebola epidemic, high levels of displacement, flooding, and extreme levels of food insecurity.
Somalia, for instance, a leader in mobile money, used e-cash transfer systems in 2011 to deliver aid to people affected by famine. During the Ebola crisis, the United Nations used mobile money services in Sierra Leone to pay health workers. In Kenya in 2015 was launched a messaging alert system for floods, fires, or terrorist attacks; and Refugees United partnered with Safaricom to allow refugees to register using their mobile phones and search for loved ones through an anonymous database. In Nigeria, Mobile Money Assists Victims of Boko Haram Violence. Attacks by Boko Haram in northeast Nigeria have caused hundreds of thousands of people to flee their homes. In response, the World Food Programme (WFP) has launched an innovative emergency cash transfer operation in the region to ensure people can cover their most pressing needs.
After Typhoon Haiyan devastated parts of the Philippines, roads had to be cleared and municipal waste removed from buildings, such as hospitals and schools. The United Nations Development Programme (UNDP) worked with the Land Bank of the Philippines to provide mobile money transfers to workers who were part of the UNDP’s “cash-for-work” program. The program worked on two levels: putting people back to work and helping clean up after the disaster — all enabled by mobile money.
5- Once someone accesses basic mobile payment services, they’re likely to access a wider range of life-improving services
There’s a trend that begins when someone starts to access mobile payment services via their mobile phone. They begin to access all sorts of other services with the potential to transform their lives — and the lives of their families. Everything from loans to start small businesses to insurance to safeguard valuable incomes to the ability to save money for the future.
6-It offers a safety net
In developing countries where health care is paid out of pocket, serious illness can be financially catastrophic. Seasonal floods and droughts can lead to hunger or starvation for subsistence farmers. Mobile money makes it possible to buy health and crop insurance more easily. MicroEnsure, for example, provides coverage for flooding, drought, hospitalization and accidental death for mobile users in Africa.
In Kenya, people who use Mobile Money are beginning to use their mobile accounts to access money for medical emergencies. Being able to receive medical care immediately also means that people’s conditions don’t deteriorate and they can return to work more quickly.
7-It helps business
By accepting payment with mobile money, businesses avoid the cost, risk and hassle of cash. In Kenya, grocery stores, hair salons and coffee shops take mobile money.
Mobile credit allows customers to stretch out payments for large purchases and helps entrepreneurs expand their businesses. One of Kenya’s credit service has lent small sums to 10 million individuals and small- and medium-sized businesses. In East Africa, 200,000 homeowners were able to buy solar power via mobile micropayments.
In Bangladesh fishermen can use mobile money to rent nets or boats as alternatives to buying those items. In turn, boat owners earn a faster return on their investments, stimulating the entire fishing sector. While this certainly happened using cash, mobile money can help speed up the process.
8-It’s good for the economy
The informal sector in emerging economies is as big as 42 percent of official gross domestic product. By shifting these business transactions from cash to mobile banking, it makes it harder for companies to evade paying taxes. Mauritius reported a 12 percent increase in tax returns in the first year of taking mobile payments. Rwanda, Kenya, Tanzania and Uganda also accept mobile tax payments.
Money also flows the other way — government-to-person payments are increasingly moving via mobile money. Afghanistan pays police officers through mobile-enabled accounts. Pakistan uses it to send salaries and pensions to soldiers. In Malawi, more than 80 percent of payments from donor groups such as nonprofit organizations to private citizens are now made digitally. The government is also transitioning payments such as government salaries and social welfare checks. The Mexican government digitized its payments, saving $1.2 billion a year. India is working to centralize and make digital its $72 billion in subsidies, welfare payments, pensions and other transfers. The World Bank estimates that efficiencies from the shift would save India 1 percent of GDP, or about $20 billion.
So while mobile money may have started as a simple solution to making money more easily accessible, it is now a key part of changing economies and improving the lives of millions of people.
9-Mobile money can help close the gender gap
As long as we keep suppressing the economic potential of women, we will never achieve the growth and prosperity we want. It has been reported that the expansion of women’s occupational choices is the most exciting. 185,000 individual women graduated beyond subsistence farming and myriad part-time incomes into business or retail sales — all because of Mobile Money.
In many family structures, women are the designated caregivers and arbiters of household resources. Digital financial services make it easy to budget, which helps women take care of essentials like school fees.
And while women’s family responsibilities take hours and hours out of their day, using Mobile Money puts hours back in. Instead of walking for miles to pay a bill or bussing for half a day to reach the nearest bank, Mobile Money users make transactions on the fly.
And the research shows that female users put their extra time to incredibly productive use, working more, building relationships, and other activity. According to McKinsey Global Institute, when we remove the myriad obstacles keeping women from producing and participating at a level equal to men, we will add $28 trillion to global GDP in 10 years.
