Various tech giants have been rolling out new payment services that convert smartphones into digital wallets. The latest services for mobile money are now replacing cash and cheque. Reportedly, the upcoming mobile wallet technologies may ease the users of a particular wallet service sending money to each otheras simply as a text message.
But in case you find this really impressive, you may get surprise to know that some countries like Kenya have adopted mobile money many years ago. Major countries like the United States, use smartphones to pay for things, but only if they have linked their mobile wallet to their bank account or debit card. But the people in Kenya don’t need any bank account or a credit history or even a lot of money for that matter and this has made the land a credible source worth observation to define the future of money.
The growth of mobile money
Mobile money has travelled a bit forward on the path of acceptance among the users, which led to its growth worldwide. From changing technologies to increasing user demands for convenience, everything has contributed mobile money in its unique way.
The statistics for growth of mobile money in 2015 can be found as follows:
- Mobile payments account for around 500 billion Dollar in the year 2015 worldwide.
- The statistics from Central bank of Kenya suggest that the Kenyans transferred over 1 trillion using mobile devices within the first 6 months in 2015.
- Lands like Kenya and Sweden are on a verge of claiming themselves as cashless on the basis of mobile money usage.
How mobile payments will grow in the coming years?
- Mobile payments are anticipated to account for 1 trillion Dollars by the year 2017 worldwide.
- Boosted awareness and security being provided, mobile payments are expected to grow 200 times over the coming 7 years in India.
- 43% of British people see contactless payments as the main payment method by 2017.
- The African market for mobile payments is expected to grow to 14.27 Billion Dollars by 2020.
Example: Kenya being a cashless economy
While mobile payments have expanded their foray to almost every country in the world, there are some countries where mobile money has become an indispensable part of day-to-day lifestyle. Let’s take an example of Kenya, which is on the verge of fully adapting mobile payments and see how things have been made smoother with the use of mobile money there
Previously, almost every bus in Kenya used to be filled not only with people or cargo but also with huge amount of cash. The only way that people working in the cities had, for sending money back to their families living in the remote villages was through the bus drivers. They used to ask the bus drivers to give the money to someone standing at his destination at the crossroads but the money generally evaporated. To solve the problem, the major challenge stayed that a majority of Kenyans did not have a bank account but a surprising fact was that 8 out of 10 adults had access to a mobile phone. So, in the year 2007, a new service made its way that enabled users to use their mobile phones for sending and receiving money. It is the year 2015, and this payment service is now often called as Kenya’s alternative currency but significantly safer and secure than cash.It has become so common that now they refer to it as texting money.
The popularity of mobile money in Kenya can be attributed to the fact that no sophisticated mobile device is required to use mobile money services there. The services have been designed to work efficiently even at the lowest level of technology. Even the cheapest phone one can have works seamless to access mobile payment services. They just need to go to the kiosk of their mobile money service provider, handing over cash and it is immediately converted in to virtual currency in their account. This ease has led Kenya embrace the fact that mobile wallets have easier access than bank accounts. This can be called as bank-less banking.
The democracy of money
Money has ever since been associated with the centralized power. It can be issued by the governments only and the banks were designated as the resources facilitating financial transactions. This model has undoubtedly worked well but certainly has some drawbacks.
The undergoing financial revolution has got the potential to be more consequential than ever before. Until now, many financial innovations have transformed various practices but, the financial institutions have always remained intact. Now has arrived the time when the financial world is welcoming a relatively very small collection of comparatively better bankers in the form of mobile money service providers
Digital currency refers to a decentralized form of money, more secure and more functional than anything ever before. Digital money has the power to serve in a transformative way. While the countries like Kenya have eased mobile money usage and in turn its reach to the highest extent, other major countries like the US and even India require linking the mobile wallets to a bank account. Digital technologies have made finance democratic on an exponentially increased level. Services like micro-lending have made it possible for everyone to acquire finance. New mobile payment systems have made it seamlessly easy for the merchants and common people to use electronic payments.Thus, over the coming time we may anticipate the remaining parts of the world to strongly integrate mobile money to enjoy cashless transactions.
Looking forward to a time when bank accounts would not be required for day to day transactions, the phone itself will suffice the need.