Mobile Money: Developing nations leading the way in early adoption

Mobile money is a relatively new budding technology that allows people to receive, store and spend money using a mobile phone. It is an alternative method of transferring funds to another person or to pay a business such as a shop or a restaurant instead of using cash, credit cards or cheques. It utilizes a mobile application and a phone number as the bank account number. Consumers can not only use their cell phones to send and receive money but also have access to a variety of financial services including loans, insurance, and many other services.

Developing nations leading the way:

Developing nations are the early adopters of mobile money services across the globe. There is tremendous scope for microfinance institutions and other financial service providers to tap the booming mobile wallet market. Kenya is at the forefront and has 93% of their adult population using mobile money services. Countries that have shown immense promise are Tanzania, Zimbabwe, Uganda, India, Pakistan, Bangladesh, and Somalia among other developing countries. Companies in every country are innovating and bringing forth new products in this competitive mobile money market.

Still breaking into new markets:

Mobile money is at an elementary stage and is being accepted in urban cities but may still be a matter of concern for mini metros and rural areas. The awareness of mobile money and availability of a reliable and consistent data network are some of the main concerns for adoption in these areas. Many people are hesitant about payments made via other modes not involving credit cards or hard cash. Users are also concerned about the security and reliability of transfers that come with security pins and KYC documents. Additionally, a majority of rural area customers continue to rely on traditional or time-consuming methods like money orders and cheque remittances when it comes to transferring funds.

Mobile money is the future:

Mobile phones today are not confined to being available only in the urban areas and have begun penetrating the rural areas too in all developing countries. This major shift has been made possible only due to the awareness created by all major telecom providers and phone makers to increase their market share. 2017 has seen new market trends including the accelerated growth of bank-to-wallet interoperability, the rapid increase in the number of fintech companies, the digitization of new sectors of the economy along with renewed efforts made by companies and governments to reach the most vulnerable part of the population.

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