There’s an understanding by some that mobile money has no place in the developed world and only those countries that are far less advanced can this be of use. South Africa is, evidently so, a developing country as we carry the title of being the most unequal society in the world. The argument is that countries with an efficient and smooth running banking system like card payments and vast ATM spread like South Africa; mobile money will struggle to grow. This is not true and absolutely reflecting the lack of foresight by those who are pushing this line of thinking. In America which has close to 70-million unbanked and underbanked population, mobile companies like T-Mobile have introduced mobile money services to serve the needs of this community. Some countries in Europe like Romania are starting to warm up to the idea of mobile money as the world still grapples with a huge number of the unbanked population. The World Bank 2014 Global Financial Development Report estimates that about 2.5-billion people in the world do not have access to banking services.
Mobile money has played and continues to play a pivotal role from Bangladesh to Peru, Kenya to Zimbabwe, and numerous countries bringing financial services to those who were previously excluded. It is reported in the GSMA 2014 State of the Industry: Mobile Financial Services for the Unbanked that, globally, mobile money users transacted a total of US$16.3-billion through 717.2-million transactions in the month of December 2014 and if cash-ins and cash-outs are excluded, mobile money users performed 479.5-million remittance and payment transactions totalling US$7.5-billion. And it is also estimated that 103 million people globally were making transactions via mobile money on a monthly basis and today there are more than 2.3-million mobile money outlets worldwide. According to World Bank, the amount of money sent to sub-Saharan Africa via remittances is expected to hit US$33-billion in 2015. An increasingly large portion of that comes from mobile.
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Now the question some tend to ask is; can mobile money be adopted by everyone including the middle and upper class? Is it possible for highly developed countries to adopt mobile money as another form of payment alongside cash and cards? The answer is a resounding “Yes”. It is something that is inevitable and in a few years it will have an adoption rate of the highest proportion. The world is starting to notice the role mobile money plays including its efficiency, speed, access, reach and of course revenues.
The slow growth of mobile money in developed countries can be attributed to various factors including that of attitude and prejudice. Mobile money has always been seen as an innovation for or from Africa due to its success in countries like Kenya, Tanzania and Uganda and a product for the poor. Due to this and an appetite by some in developed countries to look down on anything that comes out of Africa, it has taken these countries years to finally realise that it is something for everyone to use.
The fact is if mobile money was first adopted and embraced by all in the West; it would be long adopted by almost every country in world. At last, this is where it is going. The rise of smartphone and its functionalities and the revenue possibilities leave mobile companies with no choice but to give people what they want; to bank, transact and pay using their phones. Uber is one of the perfect examples of this. Today’s young people are different and they will be the driving force behind the rise of mobile money worldwide. They like their products cool, fast, efficient and painless. Mobile money offers this.
A lot of focus has been placed on mobile money since the growth of IoT (Internet of Things). Devices are becoming cleverer, everything from your toaster to your car is being connected to the internet and soon you will be able to make payments from any device. Companies like Samsung are developing IoT devices that will allow us to pay for goods directly from your kitchen appliances? Another industry reshaping itself by making use of mobile money are gas stations and the transport industry.
Companies are linking mobile money to their fleets allowing them to pay for fuel using mobile wallets. This gives them more control over spend and management has the ability to keep track over where drivers stop and spend money. Supermarkets are to become a new experience. Soon we will see a world where shopping trollies become clever. Your trolley will know exactly what you picked and you will be able to pay for you goods without standing in the queue, meaning the end of long queues in your favourite shop.
Researchers also point out that mobile payment systems also promise to help governments run smarter, especially if they result in less use of cash. According to Singaporean economist Ryan Rommann, “if economists and statisticians could analyze the movement of money in real time, underlying patterns might help show the causes of poverty, bubbles, or inefficiencies”. He asks “could the next downtick in national grocery spending be identified within hours, and warn quickly of potential economic trouble?”. This is the power mobile money and the solutions it is bringing to the world.
Personally I do believe mobile money will become the killer of the credit card within the next couple years. Like the saying goes “cash is king” and I don’t think cash will ever disappear but cards will. Over the last couple years big players like Apple and Google have spent millions on developing patents and products to grow the mobile money market and all the products they have developed are moving towards replacing the card with one device, your phone. Paypal former President David Marcus called it “Money 3.0”- saying cash was Money 1.0. Plastic was Money 2.0, and now mobile; “Ultimately, all of these things will converge to mobile”, he said. Now the question is; “who wants to be left behind”?
