Advances of mobile technologies have opened up new possibilities, not just for contact, but also for the usage of a mobile phone as a medium for a variety of applications. The advent of data transmission facilities and the growth of mobile financial services around the world have allowed mobile money services to expand and evolve rapidly.
The African continent confronts problems in the financial infrastructure industry that are diagonally compared to the condition in the western world. With almost 80% of adults in Africa not having links to formal or semi-formal banking facilities, much of the continent is still unbanked – at least in the conventional context. M-PESA has revolutionized financing in Kenya.
There is a massive demand for mobile money services among the world’s 2.5 billion citizens who do not have a bank account (according to World Bank figures). The opportunity is growing due to technical innovations, declining smartphone prices and intensified rivalry to support this demand.
Mobile money – the power to move cash, pay taxes, lend, borrow and even buy insurance from mobile phones – is changing the lives of individuals and small companies worldwide. The freedom to access funds anywhere, at any moment, saves resources, increases protection and offers a way of investing and handling capital more efficiently than conventional approaches. But it also generates an impact that stimulates greater economic development. Below are 3 reasons why Kenyans love Mobile Money and M-PESA.
1. Make banking Quicker and Safer
In many developing markets, more citizens have cell phones than they have bank accounts. In Bangladesh, for example, more than 75 % of the population has cell phones, but just 31% of bank accounts. For more than half of rural Kenyans, the closest bank branch needs at least half an hour of travel time, with the possibility of robbery along the way. Going to the bank is often expensive: around half a day’s average salaries for more than a third of rural Kenyans. Mobile money places the branch of the bank on your side.
2. It binds Families and Friends all around the Globe
Mobile money helps individuals to deliver payments to families, acquaintances and business partners. Mobile operators have connected their financial payment systems to one another, making it simpler to transfer money between various services.
This is significant since remittances are the primary source of foreign investment on the African continent, though it still costs more to send money to Africa than to anywhere else. The ability to reduce the expense of moving the capital to and from Africa is indescribably high, and a variety of start-ups are operating on this topic from various perspectives. Kenyans cannot only receive and withdraw money locally but through link mpesa to PayPal, they can earn money from abroad through freelancing.
Of note, Bitcoin already has the ability to become a big player in the sector for remittances, with both banks and start-ups banking heavily on emerging technologies. African banks are accepting Bitcoin as a means to deter disruptors while entrepreneurs are focusing on building blocks to render inexpensive cross-border remittances in Africa a possibility and disrupt banks in the process. At the same time, the general public also does not know anything about bitcoin and is therefore not generally known, with only 2 physical stores in Kenya embracing it as of today.
3. It helps to address the challenges of Humanitarian Crises and Natural Disasters
One largely unnoticed advantage of the spread of mobile, though, was a decrease in the number of fatalities from natural disasters. Mobile technology has strengthened early warning systems, rendered it easier for humanitarian agencies to track droughts and other natural hazards, and helped displaced people find refuge and food. This position was expanded in 2015 when more than 100 telecom operators in 75 countries – including nearly 30 African nations – signed the Humanitarian Communication Charter, an effort to establish best practises for reacting to humanitarian crises.
It is very useful for African governments that have experienced crises such as the Ebola virus, high levels of refugees, floods and severe food shortages in recent years.
Somalia, for example, a pioneer in mobile currency, used e-cash payment services in 2011 to offer assistance to citizens affected by famine. During the Ebola outbreak, the United Nations used mobile money systems in Sierra Leone to compensate for health staff. A messaging warning system for flooding, explosions, or terrorist threats was introduced in Kenya in 2015; and Refugees United collaborated with Safaricom to enable refugees to register through their cell phones and check for loved ones via an anonymous database. Mobile Money supports victims of Boko Haram abuse in Nigeria. Attacks by Boko Haram in north-eastern Nigeria have forced hundreds of thousands of citizens to leave their homes. In addition, the World Food Program (WFP) initiated an ambitious emergency cash transfer operation in the country to ensure that citizens will fulfil their most urgent needs.
After Typhoon Haiyan destroyed areas of the Philippines, highways had to be cleared and urban waste had to be collected from houses, such as hospitals and colleges. The United Nations Development Program (UNDP) has partnered with the Land Bank of the Philippines to offer mobile money transfers to staff who have become part of the UNDP’s ‘cash-for-work’ scheme. The software succeeded on two levels: getting citizens back to work and helping clean up after the disaster – all rendered possible by mobile capital.