Can you imagine your life without your mobile phone? Perhaps, you can but it’s hard to envision, and understandably so. The mobile phone has traversed far beyond its initial purpose as a tool for communication, and entered a multidimensional realm of information, convenience, and control – our gateway to the world. To expats and migrant workers, who leave their families in search for better days, mobile phones have long served as the single most important link between their loved ones at home and themselves. Through voice calls, messaging and social media apps, they manage to stay close to all that’s happening back home, from miles away. Lately however, for expats and their families, mobile phones have acquired a whole new meaning. With the advent of Mobile Wallets in some countries, families are being able to receive money from their loved ones abroad on their mobile phones. Using mobile wallets, people are now able to make payments for utilities, shopping, and access a host of financial products on the go. The mobile wallet revolution is changing the way people deal with money, and Africa, the birthplace of this revolution, is a fine example.
In 2007, Kenya witnessed the launch of M-Pesa, a mobile money system that went on to change the country’s payments future forever. Originally designed to allow microfinance-loan repayment to be made by phone, reducing the costs involved with handling cash, it eventually evolved as a general money-transfer scheme. Today, M-Pesa is a payments norm and most Kenyans are using it to make a host of payments. Kenya set an example to the rest of Africa, and other countries like Uganda, Tanzania, and Ghana followed suite. But why does mobile wallet work so well for Africa?
Convenience has been the mother of most recent innovations and mobile wallets are no exception. Expats from African countries with a functional mobile wallet infrastructure, can send money directly to any registered mobile wallet within minutes. The receiver does not need a bank account or a cash agent nearby to access the funds. The receiver can now make all kinds of payments through their mobile wallet. If a need for cash arises, the receiver has the option to do that from various agent locations and ATMs. The convenience brought by mobile wallets, is one of the main reasons for its adoption in some parts of Africa. Some countries in Africa, with weak banking and general infrastructure can greatly benefit from the adoption of mobile wallets.
As mentioned above, some countries in Africa are still developing their banking infrastructure and banking the unbanked is not always an option. Africa is one of the regions with the highest rates of financial exclusion. However, mobile penetration is relatively high. Mobile wallets are the perfect tool to bridge the gap between financial services and the underserved in Africa. Mobile Service Operators in Africa understand the potential of this tool and are aggressively working on launching innovative financial services via mobile for their customers. Through collaboration with financial services institutions, many mobile wallet operators have also started offering services like credit, insurance and savings to their customers.
Being cashless, money transfer and payments via mobile wallets offer more security. Mobile wallets allow customers to track their transactions and keep digital record of their payments. For international remittances, many African expats, who used illegal (unsafe) ways to send money in the past, are opting for mobile wallets as a mode of money transfer.
By reducing the need for physical touchpoints to carry out payment transactions, mobile wallets are reducing the cost of money transfer and payments in Africa. As Africa remains one of the most expensive regions to send money, further adoption of mobile wallets and other digital technologies will go a long way in reducing the cost of remittances in the region.
The future of global economy heavily depends on developing regions like Africa and South Asia. Mobile wallets have a key role to play, in empowering these countries. Having access to a seamless payments network is the first step towards achieving true financial independence and progress. At Xpress Money, we have always believed in the immense potential of mobile wallets in Africa and other regions. We have partnered with the top mobile wallet service providers to offer convenient money transfer solutions to millions of African expats. We have also announced our partnership with Huawei to grow our mobile money footprint in the country. The partnership will give us access to Huawei’s mobile money service platform, which has over 100 million mobile money accounts globally. There is a need for greater collaboration between, banks, non-banks and money transfer operators to achieve the dream of true financial inclusion in Africa and beyond. We know and understand the true potential of mobile wallets in the money transfer and payments sector and the truth is that we have barely just scratched the surface.