Fintech, or financial technology, is disrupting the financial industry in many ways, and one of the most significant developments is the rise of mobile money. Mobile money services allow users to store and transfer money using their mobile phones, without the need for a bank account. This has made financial services more accessible to people in developing countries, where traditional banking infrastructure is often limited.
Banks and mobile money companies are now competing for the same customers. Banks have the advantage of their established brands and networks, but mobile money companies are often more agile and innovative. For example, mobile money companies were among the first to offer peer-to-peer payments and mobile wallets.
The competition between banks and mobile money companies is having a positive impact on consumers. It is driving down fees and improving the quality of services. It is also making financial services more accessible to people who were previously unbanked.
The Rise of Mobile Money
Mobile money first emerged in Africa in the early 2000s. It was initially used for remittances, but it has since expanded to include a wide range of financial services, such as savings, loans, and insurance.
Mobile money has been particularly successful in developing countries, where it has helped to improve financial inclusion. According to the World Bank, over 1.3 billion people worldwide now use mobile money services.
The success of mobile money can be attributed to a number of factors, including:
The widespread availability of mobile phones;
The low cost of mobile money services;
The convenience of using mobile money to send and receive money;
The growing range of financial services offered by mobile money companies.
The Competitive Landscape
The competitive landscape between banks and mobile money companies is complex and varies from country to country. In some countries, banks have a dominant position, while in others, mobile money companies are the market leaders.
Banks have a number of advantages over mobile money companies, including:
Their established brands and networks;
Their expertise in providing financial services;
Their access to capital.
However, mobile money companies are also gaining ground. They are often more agile and innovative than banks, and they are able to reach new customers more easily.
The competitive landscape is also changing due to the emergence of new technologies, such as blockchain and artificial intelligence. These technologies are enabling banks and mobile money companies to offer new and innovative services.
The Impact on Consumers
The competition between banks and mobile money companies is having a positive impact on consumers. It is driving down fees and improving the quality of services. It is also making financial services more accessible to people who were previously unbanked.
For example, mobile money companies have helped to reduce the cost of remittances. They have also made it easier for people to save and borrow money.
The competition between banks and mobile money companies is also leading to the development of new and innovative financial products and services. For example, some banks and mobile money companies are now offering mobile wallets that can be used to pay for goods and services in stores.
Conclusion
The competition between banks and mobile money companies is good for consumers. It is driving down fees, improving the quality of services, and making financial services more accessible.
It is difficult to say whether banks or mobile money companies will ultimately emerge victorious from this competition. However, it is clear that both banks and mobile money companies will need to continue to innovate and adapt to meet the changing needs of consumers.
FAQs
What is the difference between a mobile money wallet and a bank account?
A mobile money wallet is a digital wallet that can be used to store and transfer money using a mobile phone. A bank account is a traditional bank account that is linked to a debit card or credit card.
What are the fees associated with mobile money services?
The fees associated with mobile money services vary depending on the provider and the type of transaction. However, mobile money services are generally less expensive than traditional banking services.
How do I use mobile money to send and receive money?
To use mobile money to send and receive money, you will need to create a mobile money account. You can do this by visiting a mobile money agent or by downloading a mobile money app.
Once you have a mobile money account, you can send and receive money by entering the recipient’s phone number and the amount of money you want to send. You can also use mobile money to pay for goods and services at participating merchants.
What are the security risks associated with mobile money?
Mobile money services are generally secure, but there are some risks that you should be aware of. For example, you should never share your mobile money PIN with anyone. You should also be careful about using mobile money services on public Wi-Fi networks.
[ abstract source: https://www.researchgate.net/publication/374292230_Increasing_Competition_Between_Banks_and_Mobile_Money_Companies_Competitors_or_Allies di Kwami Ahiabenu ]