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Mobile Money: Alternative or Integral to Cash Management Strategy?

 Mobile Money:  Alternative or Integral to Cash Management Strategy?

by Karin Flinspach,  Managing Director, Head – Global Cash Products, Standard Chartered Bank

‘Mobile money’ i.e., payments and collections through wallets held on mobile devices, has grown exponentially in recent years, but there continues to be an unspoken assumption that mobile payments are somehow an alternative channel for payments than more ‘traditional’ electronic transfers or card payments. With mobile money now the dominant form of payment in countries such as Kenya, with rapid growth in countries across both Africa and Asia, treasurers should no longer consider mobile money to be a niche or optional payment solution, but a core element of their cash management infrastructure.

Catalysts for mobile money

Africa has been the crucible for the birth and subsequent growth of mobile money. The combination of a large unbanked population, and a rapid increase in smartphone and feature phone usage (i.e., cheaper handsets with more limited functionality than smartphones) provide the ideal conditions in which mobile money can flourish, such as 

M-PESA in Kenya. In addition, as banks may be less accessible, more expensive and have less ‘privileged’ a relationship with customers than telecom providers, particularly in rural areas, consumers and small businesses often find it more convenient to work with telecom providers, an issue that has been exacerbated further following the recent collapse of some local banks.