Africa has become the leading continent in mobile financial services. Africa entrepreneurs with a simple mindset turned to mobile services during the Covid-19 pandemic.
Africa owning 55.2% of 310 live mobile money services in 2020 is proof that the number of persons enrolling in digital services during the pandemic has increased.
Africa is now enjoying the benefits of mobile money while sending, storing, and spending money in all spheres of life.
Below are the ways the use of mobile money is skyrocketing in Africa to build a better financial world:
1. Accommodating both literate and illiterate
Mobile money has made the transfer of cash flexible even with no bank available.
The use of mobile money has made it easy for rural inhabitants to access sending and receiving money regardless of the subscriber’s level of education.
The inability to read and write is not a hindrance to participating in mobile money as it follows a less complicated procedure.
Africans participated in mobile banking because it accommodates all and sundry with no segregation.
2. Facilitating the payment of utility bills
The use of e-money to pay utility bills is now feasibly possible – thanks to mobile money.
The existence of mobile money made it possible for everything like utility bills, school fees, taxes, international transfer to friends, review recent transactions, zero service fee, instant refund of a failed transaction, check account balance, and more.
Mobile money has made the elimination of physical cash transactions in Africa especially. Mobile money transaction has saved the increasing population from bank cues.
All in all, mobile money services are pervasive, and everything the bank does in a faster way, and because it permits payment of utility bills, Africans thus practiced it.
3. Fast deposition and withdrawal of money
Another reason mobile money is leading in Africa is that mobile financial services have become instrumental in integrating the hitherto unbanked segment of the population in Africa.
It has made deposition, withdrawal of money very simple and fast. Mobile money has saved people from lengthy work and time-consuming protocol of physical banking.
Additionally, mobile money in a faster way has enlightened the public, especially in Africa, on how to conduct a financial transaction independently.
One of the significant reasons mobile services thrive in Africa is that it is effortless to access.
Mobile financial services are 24/7 available and are always there whenever you need them, unlike traditional banking.
It is just a systematic process that requires a functional mobile phone, data, and you can operate the app efficiently.
5. Highly secured
Mobile financial services are just as safe as bank transfers, with zero room for any unwanted transactions.
Like how different financial regulations protect banks, mobile money is protected by private pin and record storage of every deal.
Mobile financial services have a highly secured mode of payment, and the introduction of this service has lessened the need for physical banks and the carriage of paper cash.
One good thing about mobile money is that even if a phone or SIM card is lost or stolen, the user’s money is kept safe.
More so, before any transaction takes place, identification in the form of a secret pin is required. Its secure mode of transaction motivated Africans to give it a try.
6. Improved financial Literacy
Through ongoing training programs and education, the financial literacy of the agents is now better.
Mobile money has been an innovation performed via cell phone, requires financial literacy, and is one of the significant reasons Africans gave it a shot because of its stipulated guide.
Since an inherent distrust of unfamiliar digital services can prevent many from engaging in mobile money, the financial literacy of magnitude needs to be improved.
Hence, to address the barrier and constraints of mobile money, there will be an improvement in people’s financial literacy.
As inferred, financial literacy positively influences the use of mobile money because an increase in financial literacy brings about an increase in the use of financial services.
7. Expansion of service
The expansion of the product services is another important reason Africans fully accepted mobile money.
The service ranged from money transactions to deposits, insurance, increasing household income, improving tax payment, and other different types of payment.
Service expansion eliminated the financial exclusion gap in rural areas.
8. Strengthening security
The majority of people gave a trial to mobile money for the sake of its strengthened security.
The mobile financial service made it possible for the mobile app to demand a password and username before logged in.
It went as far as having “multi-factor authentication,” where two or more kinds of verification will prove it’s the owner.
9. Reduced potential for corruption
Mobile money is primarily used in Africa to reduce the rate of corruption.
This mobile money opens the door to all sorts of payments like taxes, licenses, permits, etc., and in a country with rife corruption, mobile financial service is the way forward. It has as well reduced less opportunity for extorts.
Furthermore, even though mobile money is drastically affecting the traditional banking system, it’s still a win-win innovation for the people and the government.
10. Offer a safety net
In developing countries like Africa, where serious ailments can be financially disastrous, and health care is paid out-of-pocket, mobile money makes it feasible to buy health insurance more easily.
For instance, MicroEnsure provides coverage for flooding, drought, hospitalization for mobile users in Africa.
11. Offering rewarded payment
Most mobile services permit one to add store loyalty or rewards cards.
When the credit card in the wallet is utilized to make a mobile purchase, it will automatically link it to your rewards program.
This reward payment is part of the reason some Africans indulged in mobile money.
Why is mobile money so popular in Africa?
In Africa, mobile money is becoming more and more used for conducting transactions for essential services.
The increasing rate at which mobile money proffers solutions to money matters has made it a part of everyday life.
Beyond individuals using mobile money, businesses and the government are steadily partnering with mobile money providers.
Why are mobile money financial transactions using mobile phones helpful in Africa?
Mobile money provides various financial services to women and those living in rural areas with limited access to traditional banking.
Growing mobile money providers in an emerging market like Africa helps boost the mobile banking transaction in the public and private sectors.
How many people use mobile money in Africa?
Mobile money is now available in most markets where access to financial services is low Africa inclusive.
In 2020, a report showed that the number of registered mobile money accounts grew by 12.7% globally to 1.2 billion, and sub-Saharan Africa has the most users.
The function of smartphones, especially in Africa, has grown from answering a call and texting messages to carrying out transactions.
As seen above, one can pay utility bills, top-up airtime, engage in a transaction, and shop online without fear.
Mobile financial services are booming in Africa because they [Africans] have realized that mobile money is highly secured, very accessible and that transactions can quickly process while sitting pretty in your comfort zone.