We have come a long way from having to queue in banks to deposit and withdraw cash to simply handling all our transactions through mobile phones. Platforms like PayPal, Payoneer, and others have been used for years to transfer cash from one end of the word to the next. As technology progresses, smartphones have become the go-to medium for handling money-related transactions. But how beneficial are these developments to businesses in the current market? The following are some of the ways that mobile money can transform businesses.
Well-documented mobile money creations like Mpesa from Kenya have really simplified how business is conducted. It has reached a point where buyers and sellers don’t even handle cash anymore; everything is done through the service, thanks to wide-ranging transactional options specific to specific business types. This has reduced the risk of having to walk around with hard cash or getting swindled as it leaves a cash trail that can be used to track down people since every transaction is linked to a personal mobile number. Conducting business is now easier and safer than before.
When you combine mobile money and online shopping, then you can create a situation where someone doesn’t even need to move from where they are to get what they want. You simply wire the money to the business, and they ship the product straight to your house. Increased convenience like this makes it easier for people to deal with other important things in their lives.
When transactions are linked to mobile phones, it means that more people will be taking part in the economy. It is estimated that over 1.7 billion adults are unbanked globally, which is due to lack of access to the banks and the huge bureaucracy involved just to open an account. However, almost everyone can access a phone of any kind; it doesn’t even have to be a smartphone for them to buy and sell. Unlike banks which require buildings for things to operate, mobile money depends on connectivity, and this has opened rural areas to more business opportunities that have greatly transformed the lives of people.
Mobile money is not 100% safe, but it is way better than regular banking as it involves very little handling of solid cash. Most of the transactions are done through mobile phones, and that has made it easier for people to move around in peace without having to carry huge wads of cash in their pockets, something that usually cataracts thugs and thieves from all corners.
Another important feature to note is that access to the money is protected by pins that are known only to the user. There are several layers of authentications that have to be met before access is granted; this includes providing the right pin, proving your identity by text verification, and your personal identification card. All these are not foolproof, but they make it harder for fraud to be committed.
It is Fast
Gone are the days when people had to wait for three days for bank cheques to mature before they could access their money, a period that made it easier for fraudsters to pull all kinds of stunts. Thanks to mobile money, business can be conducted within seconds. Banks are also embracing the technology, calling it mobile banking, and this allows the seamless transfer of money from a mobile number to the bank at very cheap rates in real-time.
People can buy and sell anything they want at a moment’s notice as long as they have the cash in their mobile phones or the bank. This has even made dealing with medical emergencies much easier because money can be paid immediately, even before the patient reaches the emergency room. The fast transfer of funds also makes it easier for businesses to update their inventory on the go compared to the past where they had to wait for the money to reflect in their bank accounts first.
Opens Businesses up for Loans
Once banks realized that people are turning to mobile money for their needs, they quickly rebranded and created ways for linking mobile money and banking; this link has helped businesses rake up good credit scores that have helped them get good loans from the bank which they can use to expand their operations, thus growing much faster. For most of these loans, no kind of collateral is needed; the bank simply needs to access the transactional history and use that information to gauge how much they can give you based on the volumes of your sales. The elimination of loan barriers has benefited businesses greatly.
It has Closed the Gender Gap
Until 50 years ago, it was almost impossible in many parts of the world for women to open bank accounts without the company of a male counterpart, either their husband or father. This limited the avenues that they could use to get money to create businesses that made them independent. But with mobile money, that is now a thing of the past. The gender gap in business has shrunk significantly thanks to the free access that is accorded to all women who may be interested in starting their own businesses.
With financial independence, many women have seen their lives transform for the better, and this had positive ramifications to the economy since it has been discovered that women are really adept at the business more than men, and the more of them get involved, the better it is for growth and prosperity.
With newer technologies like Bitcoin gaining prominence, it is only a matter of time before the entire world goes cashless, embracing mobile money and bitcoin for all business operations. This will bring more security and flexibility, which will, in turn, make it easier for more people to conduct business and improve their lives. All that will be needed is for better security measures to be put in place to ensure that nobody loses their hard-earned money.