Mobile Money: What You Need To Know …Benefits, Reasons Why Mobile Money Is The Future

Goddie ofose, chairman, Brand Journalist's Association of Nigeria (BJAN);  Musa I. Jimoh, deputy director, banking & payments system department, Central Bank of Nigeria (CBN); Nkiru Olumide-Ojo, head, marketing and communications, Stanbic IBTC, and Akomen Omijeh, corporate communications manager, Nigerian Bottling Company, at the BJAN 4th annual brand & marketing conference 2016, with the theme "Mobile Money in Nigeria" in Lagos, at the weekend. PHOTO;AKEEM SALAU

Brand Journalists Association of Nigeria (BJAN) presents the 4th Annual Brands & Marketing Conference 2016 with the theme “Mobile Money in Nigeria: Challenges, Opportunities, Threats” with an interactive session, which was held at the Chartered Institute of Bankers of Nigeria (CIBN) House, Ijewere Hall, Adeola Hopewell Street, Victoria Island, Lagos, in its 4th year focused and designed to discuss value innovative strategies around new technologies and latest offerings that can transform mobile money services.

Other challenges highlighted by speakers at the event include the non- existence a single national data, limited agent outlets, high cost of transactions, poor legal framework and profit-sharing contention amongst players in the value-chain.

Mobile phone technology has reduced communication costs in many parts of the world from prohibitive levels to amounts that are, in comparison, virtually inconsequential. The benefits derivable from Mobile phones transcends communications to other facets of everyday life such as health, education, banking to mention a few.

Today Mobile subscribers in other markets such as Kenya, Uganda, Tanzania, Senegal, Ghana, South Africa, India, Indonesia, Philippines, Japan amongst others are beginning to use Mobile Money for transactions and services including domestic and international remittances, bill payment, payroll deposit, loan receipt and repayment, purchases of goods and services ranging from prepaid airtime to groceries, bus tickets or micro-insurance.
The World Bank further notes that Mobile Telephony offers tremendous promise to facilitate the flow of money among rural and poor families at much lower transaction costs, bringing the bank to those currently unbanked.

What’s Mobile Money

Mobile Money is an electronic payment product that enables individuals to transfer financial value through a mobile phone without using a bank account. In Mobile Money, financial value is stored in a virtual wallet which is represented by the phone number of a subscriber.
It's a data repository that houses consumer data sufficient to facilitate basic payments from a mobile device. Mobile Money focuses on the unbanked, to give financial inclusion to the lower segment who can’t afford banks or have been excluded by banks as per their KYC or other business rules.
It’s delivery of an efficient mobile banking experience has become a key differentiating factor rather than mobile money.
In the case of mobile money, a mobile phone number is linked to a cash pool that has been pre-funded and then would be able to make payments.

Mobile Banking Vs Mobile Money

Mobile Banking: Customer has a conventional bank account, his money is held in his bank account, he can choose to use his phone as a channel to make payments from his account or he can use another channels e.g bank teller, ATM, in store POS device.
Mobile Money: Customer has no regular bank account - he has a MM account linked to his phone number, his money is held in a pooled single account at a bank, uses his mobile phone to make payments from his account, the MM system tracks ownership of the money in the pooled account.

How does Mobile Money work?

Mobile Money transforms your mobile phone into an electronic wallet (e-wallet). You can store funds in your mobile e-wallet for making electronic payment for goods and services, to transfer funds to family and friends. This reduces your need for cash when shopping and might help you handle cash with the daily limits of the CBN. You can also receive money on your mobile money e-wallet.
Your e-wallet can be funded via authorized agents of your mobile money service, partner banks and networks of your mobile money service, transfers from your ATM/Debit cards, or any other funding method offered by your service provider. Once funded you can securely and conveniently use your mobile money to send money to family and friends, buy airtime of any network, Pay bills like DSTV, GOtv, ACtv, MyTV, IKEDC bills, etc.

The growth of mobile money services is set to be one of the most significant trends of the coming years. With the advancement of technology and the expansion of mobile money ecosystem, mobile phones are becoming a multi-purpose payment platform.

Mobile money transactions across the globe will transform the world of finance and the world of mobile. It will change human’s lives with increased convenience, enhance the standard of living for the unbanked population and stimulate economic development.
The Central Bank of Nigeria on its part, will live up to its billings in promoting a safe and efficient payment system.

Mrs. Toro Oladapo, director, press and public affairs, ministry of information Rep Hon Comm for Information & Strategy Lagos State; Goddie ofose, chairman, Brand Journalist's Association of Nigeria (BJAN); Mr  Francis Nwoboshi, head, mobile & acquiring channels, Stanbic IBTC; Ms. Clara Okoro, vice chairman, BJAN, and Henry Ojiokpota, principal manager, policy completion economic analysis, NCC, at the BJAN 4th annual brand & marketing conference 2016, with the theme "Mobile Money in Nigeria" in Lagos, at the weekend. PHOTO;AKEEM SALAU

Provision of Mobile Money Services:

Mobile money services can be provided through three (3) distinct models identified as: (1) Telco led (2) Bank led and (3) Independent “hybrid” version .

The Telco led Model - This is the model in which the Mobile network Operators (MNOs) are managing the Agent Network, the Platform, the USSD network and offering payment and non-banking products. For this model, the banks are holding the money. The Telcos/MNOs are in charge of branding, product development, campaigns, etc. However the mobile financial services service provided by the MNOs are limited to the subscribers of that specific MNO. 

The Bank led Model – In this model, the banks are the custodian of the fund, product while the MNOs are offering the USSD interface and managing the agent network and platform. The bank led model is not limited to any MNO subscribers but available to all mobile phone users. This gives the mobile phone users access to banking services – savings, loans without having to walk into a bank hall or fill out a single form.
The Telcos are good in branding, campaigns, products, agent management and the Banks are good in safeguarding of the fund. The adoption of any of the different Mobile payments business models depend on the applicable regulatory climate, consumer culture, and demographics. In the most basic sense, a business model may be bank-centric, mobile-operator led, or partnership led with technology service firms often included to enable the application or platform for payment service delivery.

Independent “hybrid” version – the model comprises innovative ways of offering mobile money services across mobile networks in cooperation with telecoms Operators and banks by a corporate organizations or firms.

Goddie ofose, chairman, Brand Journalist's Association of Nigeria (BJAN);  Ms. Clara Okoro, vice chairman, (BJAN; ); Nkiru Olumide-Ojo, head, marketing and communications, Stanbic IBTC;  Francis Nwoboshi, head, mobile & acquiring channels, Stanbic IBTC, and Shina Badaru, publisher, Technology Times, at the BJAN 4th annual brand & marketing conference 2016, with the theme "Mobile Money in Nigeria" in Lagos, at the weekend.PHOTO;AKEEM SALAU

Challenges:
The following challenges, amongst others, have been identified by the Industry Working Group as part of hindrances to the uptake of mobile money services:
-Resource contention and clamor for more participation in the value chain by the Telecommunication companies in order to partake in profit sharing.
-Limited Agency Distribution Outlets across the nation
-Lack of interoperability among competing technologies and payment systems (NIBSS, MNOs & MMOs).
-Lack of adequate collaboration between Government, Telcos and Banks to effectively promote the system.
-Lack of finance and underestimation of the amount of resources required to effectively build and grow Mobile Money business e.g. the agent network, technology and marketing.
-Limited access to ICT infrastructure by the end users

To address the aforementioned challenges enumerated above, the CBN emphasized on the need for the Commission to encourage the Telcos to register as Super Agents, along-side with other interested infrastructure service providers in order to stimulate their participation in the mobile payments ecosystem so as to facilitate the uptake of mobile money and financial inclusion services nation-wide.

However, finding the right technology and business models that are well suited for our peculiar operating environment has been a challenge as the actors have distinctly different business drivers and motives. Thus, continuous partnerships and strategic engagements, cooperation among the players and appropriate regulatory directions are required to help achieve the desired long term goal of this laudable initiative.
Mobile phone infrastructure was identified as a practical strategy for financial inclusion by the CBN, hence the development of a regulatory framework for Mobile Money Services in Nigeria in 2009. This was in response to the dictates of the PSV2020 document which emphasised on displacing cash in favour of electronic channels for payments, anchored on National utilisation and International recognisition
With the implementation of the framework, the inadequacies were brought to the fore, hence its review in 2015. This also resulted in the issuance of Guidelines on Mobile Money Services in Nigeria in March, 2015.

Akomen Omijeh, corporate communications manager, Nigerian Bottling Company; Goddie Ofose, chairman, Brand Journalist's Association of Nigeria (BJAN);  Francis Nwoboshi, head, mobile & acquiring channels, Stanbic IBTC, and Bolaji Abimbola, MD/ CEO, Indigo, at the BJAN 4th annual brand & marketing conference 2016, with the theme "Mobile Money in Nigeria" in Lagos, at the weekend. PHOTO;AKEEM SALAU

Possible solutions and enablers:

Stakeholder Collaboration - to ensure affordability, quality and availability of key infrastructure such as USSD, Data etc
Integration of data (BVN, Biometrics, Phone numbers, usage patterns etc) between NCC and CBN, this will further enhance KYC quality in the least KYC band and allow for more innovative products in this strata (micro loans)
Interoperability is increasingly becoming an essential expectation in the value proposition. A need to resolve all bottlenecks and enforce full compliance/ implementation

Need for Incentives -Tax Exemptions/Rebates: Incentivize corporates, NGOs etc who either pay through or receive mobile money payments for their mobile money related transactions 

Government Support -Payment of Government to person’s payment via MM (Bursaries, salary, allowances, Social disbursement benefits (across MMOs)

State and Federal Advert Agencies – Visibility and top-of-mind are critical components of promoting financial inclusion. The prohibitive pricing regimes of these agencies make it difficult for operators to effectively drive awareness

Benefit of Mobile Money:The evolution of the mobile phone markets has opened avenues for mobile money services to thrive. Regular advancements in the mobile channel have created awareness amongst financial institutions and merchants alike, especially in developing countries. Who are now identifying that an ever greater proportion of their digital presence may be allocated to mobile.

Here are a number of reasons that holds potential for the future of mobile money services:
Ease of Use: Mobile money helps people pay for goods and services; transfer money from almost anywhere even if they are not near a bank office. For example, in Kenya, M-Pesa has made it an integral part of the economy and providing mobile experiences that meet consumer expectations.

The Unbanked: Embracing mobile money services will go a long way to addressing the needs of the unbanked, under banked, and the unhappily banked. Thereby, enabling them to make payments, transfer money to merchants, friends or relative using mobile devices. Reducing the need for long queue’s in banks and bringing them into the fold of modern economy.

Accessibility: Mobile money transfers are filling this need and proving better at reaching poor rural resident than banks or standard money transfer services. It has changed commerce and eased trade by breaking the rigid rules of high finance and banking transactions.

Convenient Savings: Among the benefits of mobile money services is the ability to use the mobile phone to save and be able to cash-out the money whenever needed. This also reduces the need for physical cash, therefore, creating a firewall for theft.

Remittances: Considering huge number of the unbanked who send domestic/international remittances in cash and widespread use of mobile phones, both in developed and emerging markets; mobile money has the potential to keep pace with consumer’s needs and expectations to transfer money at any time of the day/week no matter how little the fund.

The Mobile Generation: The adoption of mobile technology is changing virtually all aspects of consumer behaviour. This presents an unprecedented opportunity for mobile money service renders to activate relationships with both new and existing customers across multiple mobile channels.

Boosts Economic Growth: The handiness of mobile devices and with mobile network operation services scattered anywhere than traditional banks, availability of mobile money services in different strategic locations is crucial for long-term adoption and widespread use of such services, boosting economic growth and social development on both the micro and macro level.
In order to maintain standard, network fluctuations, the effect of loss of mobile phone, unauthorized use and the risk of incorrect transfers are concerns that needs to be addressed head on by the service providers in ensuring efficient and effective use of the services in the long-term.

Social Media Adoption:
Nigeria has been adjudged to be among the leaders in social media interaction in the world. The implication is a ripple effect on other social media activities like payments. Social media service providers are always exploring new innovations and they won’t take long to actively pursue the emerging mobile money industry.
-Facebook has been one of the first social media service to drive mobile money to date
-Google Wallet is another e-payment platform developed by Google for peer-to-peer payments service
-WeChat (free messaging and voice calling mobile application)provides active users with a digital wallet that can be used to pay for products either offered by WeChat or accepted at certain merchants.

Among dignitaries that attended the conference included Emeka Oparah, Director, Sponsorship, events PR, Airtel Nigeria, Francis Nwoboshi, Head, Mobile & Acquiring Channels, Stanbic IBTC, Melevin Awolowo, Acting Communication Manager, Stanbic IBTC,  Demola Adesina, Business Banking Marketing Manager, Stanbic IBTC, and Ibrahim Abdulahi, Finance Officer, WHO.
Others included Toro Oladapo, Director, Press & Public Affairs, Lagos State Ministry of Information and Strategy, who represented the State Commissioner for Information and Strategy, Steve Ayorinde, Emmanuel Agha, CEO, Innovatives, Sola Fanawopo, CEO, eMaginations, Aminu Bizi, CEO, Bizi Mobile Cashless among others.

November 07, 2016