Call it a revolution. Something big has hit the banking and telecommunications world. It is mobile money, whereby mobile handset has become the primary digital channel for provision of banking and related financial services in Nigeria, a special Nigeria CommunicationsWeek investigation can now reveal.
When fully developed, you can make all your transactions without cash - you pay with your cell phone.
It is different from what banks erroneously classify as mobile payment whereby subscribers cannot do more than check account balance or transfer money between self accounts in same bank.
Nigeria CommunicationsWeek gathered that in simple terms, mobile money enables users to send each other cash using their mobile phones, simply by inputting the recipient’s phone number and the amount. The service utilizes SMS text messages.
It will create jobs and wealth in the key entities involved in the mobile money transfer service including, cash-in/cash-out retailers, banks, mobile carriers, handset vendors, and third party money transfer enablers.
The business models depend a lot on the regulatory freedom given by the Central Bank of Nigeria (CBN).
The World Bank in Africa thinks mobile money is the “cornerstone for development” due to its potential to mobilize remote rural economies.
Unlike the skepticisms that greeted other big bangs, mobile money may be an instant hit and proponents of the fad said the service would reach 900 million people by 2014.
It is already working very well in Kenya and the Philippines. In Nigeria, MoneyBox Nigeria is planning to replicate the success story and has got the nod of the CBN for mobile banking.
Elsewhere, MTN, Zain Nigeria are also positioning to key into the honey pot.
Nigeria CommunicationsWeek gathered that most banks know they cannot compete on their own and so are happy to provide the cash float for the systems in the belief that in the long-term, they are opening up a channel to potential customers.
But wait, there are roadblocks to full blown money service and one of them is the lack of clarity around regulation. Who will regulate the service? Is it Nigerian Communications Commission (NCC) or CBN?
There is also the issue of security. Though transfers are expected to be limited to certain amounts, there are questions on how the operators are expected to keep the service secure, while still making it convenient and quick to use.
Nigeria CommunicationsWeek gathered that by using mobile money for transactions, Nigerians will be joining Japan in breaking technology barriers that remain in Europe and the United States - paving way for what could be the cash of the future.
Emmanuel Okegwale, a mobile payment expert said mobile money is ideal because it is cheap and ubiquitous and can authenticate the payer and payee, as well as record the transactions.
