What future holds for Mobile Money & Agent Banking?
In an East African country, an idea that gives birth to the developing world by storm. The concept of mobile money solution was introduced in Kenya in 2007 by two mobile network operators, namely Safaricom and Vodafone.
Although it is believed that a similar idea emerged in the Philippines in 2005, and Kenya’s M-Pesa services took it to a new level. Today, mobile money has expanded its reach in developing markets in Africa, Asia, and Europe by more than 61 percent.
Future predictions for mobile money
The 2015 Bill and Melinda Gates report describes how digital money transfer solutions are changing the financial industry game and bringing economic freedom to billions of people who do not have access to traditional banking.
The report predicts that by 2030, more than 2 billion people, who make up 40 percent of the world’s adult population, will save and transact money through their phones. In recent times, mobile-payment service providers have been expanding their services to cover formal banking’s core services.
A second report from the International Finance Corporation estimates that more than 200 million formal and informal businesses in developing economies are represented their positive and planned aspect for mobile money as thier financial services.
M-Pesa as the role model
M-Pesa’s success lies in the business model of targeting lower income customers, most of whom cannot access or afford traditional banking services. In Kenya, M-Pesa has evolved from a money transfer service to a single credit and savings facility.
For instances, through an M-Kesho account, customers can save money on their phones and return up to 3 percent. Safaricom has partnered with a commercial bank in Africa to provide M-Shwari services enables users to save and access credit through their mobile phones. To date, at least five Kenyan adults are active M-Shwari users.
Future of mobile money and agent banking
Nowadays, consumers are quickly adapting non-cash payment transactions that are simple, quick, and convenient. Gone are the days when a cheque clearance took seven consecutive business days.
Now, you can quickly transfer the money in just a click. Encrypted, convenient, and hassle-free are some of the attributes that described mobile money’s future, let’s take a look.
1 – Rise in eCommerce due to Coronavirus outbreak
The coronavirus pandemic has changed the way people used to shop for their products and services. Nowadays, people are following social distancing, and thus, they tend to buy online without stepping out of their homes. Grocery, apparel, repair services and kids care, everything is now at their fingertips.
The rise in online shopping has completed transformed the mobile money as the eCommerce stores offer an option to store money in their e-wallets. For instance, Amazon encouraged its customers to use Amazon Pay for making payments and for receiving funds for their return items.
2 – Peer to peer payment app
Google Pay, Phone Pe, PayPal are some of the latest peer-to-peer payment trends followed by every Gen Z of the world. They are entirely aware of the payment, and thus, they tend to invite their friends to make payments and receive rewards from the applications. Facebook also invented a peer to peer payment app where the friends can distribute the bill payment, rent payment within its messenger app.
3 – Enhancement in NFC payments
Near the field, commerce payments are getting increasing popularity due to the rising demand for credit cards. Nowadays, the consumer is very much aware of the cashless payment system, and thus, there comes the role of NFC payments. One of the best examples of NFC payments is QR codes. These quick response codes are uniquely designed and can be easily installed in the merchant’s device.
4 – Transferring money on UPI
The UPI, technically known as United Payment Interface, allows instant payments from one bank to another by creating a virtual payment address. Nowadays, when the customers are busy with their hustle, it is challenging for them to log in to their bank account and create the VPA. There are many third-party payment apps, designed to facilitate payments by using virtual payment address.
5 – Cybersecurity
With the rise in popularity of mobile money, there increase online threats and cybercrime. The digital payments need much attention when it comes to threat control and risk management. According to CISCO, companies can have more than $5,00,000 in a year. It is highly essential for agent networking to implement new cybersecurity technologies like artificial intelligence, machine learning, biometric authentication, and pattern matching for preventing real-time fraud.
Factors for growth in mobile money
More agent networking providers are recognizing the importance of creating an open and level playing field for mobile money services. The main factors responsible for the rapid development of the mobile money ecosystem are:
Growing Mobile Customer Base
With the ever-increasing customer base, the mobile money ecosystem’s further development has become more comfortable, as it has diversified its growing customer usage and service portfolio. Network providers and agency banking solution saw the big picture and invested in new products and services to create an expanded ecosystem of mobile money driving, enabling mobile money to influence business and social. Providers of mobile money services are trying to make such services more sustainable, profitable, and relevant to customers in the long run.
Organized Agent Management
This factor became essential to capture the trend of comprehensive mobile money services and digitize cash. Operation and seamless transactions are the roots of this success. Agents remain the backbone of the mobile money system and act as the face of mobile money to enable digitization and distribution rather than the slow banking process.
User-interface and its simplification
Many redesigns are being done to simplify both physical and access through the agent network and restricted access through the mobile interface. That’s why the easy-to-use interface for initiating mobile money transactions has become a fast driving force for the accelerated adoption of mobile services globally. This system is essential for any order. Mobile money services ensure that the transaction takes the least amount of time to process and complete.
Enhanced Scalability by networks
Rapid adoption due to the growing number of mobile money service providers and agents and reduced customer activity levels. With mobile broadband now rapidly expanding and being made available in rural and under-segment areas, such services’ potential seems incredibly scalable and long-term. This is the reason why providers or tors are willing to invest heavily in mobile money services.
The mobile money provider must scale their businesses to provide new opportunities by using innovation, technology and rising demand. They need to identify new horizons and experimenting with out of the box mobile money ideas.
Nikunj Gundaniya, Product manager Digipay.guru, one of the leading digital wallet app development company USA, which provides mobile finance application development services. He is a visionary leader whose flamboyant management style has given profitable results for the company. He believes in the mantra of giving 100% to his work.