Mobile money transfer is expanding rapidly throughout the globe because it is well-suited to the era of smartphones and instant payments. Merchants can collect customer payments anywhere using a mobile point-of-sale system or other mobile devices, such as smartphones or tablets.
P2P payment applications like Bizum also use mobile payment technology, which allows users to transfer money to friends and family and make in-store and online transactions. These mobile payments may assist with various issues, including collecting contactless payments on the move, providing additional payment choices, and reducing in-store wait times.
This piece will cover how mobile money transfer is impacting the financial landscape:
It streamlines the banking process and increases security
More individuals in many developing countries now own mobile phones than have bank accounts. More than 75% of the population in Bangladesh has access to a mobile phone, yet just 31% of adults there have bank accounts. More than half of those living in rural Kenya must drive at least half an hour to the closest bank branch, putting them in danger of theft. More than a third of those living in rural Kenya spend more than half a day’s average pay on transportation to and from the bank. Luckily, bank services are now within reach, thanks to mobile money transfers.
Improves cash flow
When a consumer purchases using their mobile device, the money is deposited into the business’s account immediately or within a few days. In addition to receiving payments from consumers who choose to use their mobile wallets, this also implies that businesses get them more quickly. This is because clients only need their mobile device to pay.
Businesses need to accommodate customers who use mobile payment systems like Google Pay and Apple Pay since more than a third of mobile wallet users now have three or more mobile wallets loaded on their devices. Accepting payments through mobile devices boosts the business’s chances of quickly receiving payment from more clients.
In developing countries, the informal sector accounts for up to 42% of official GDP. Mobile banking makes it more difficult for businesses to avoid paying taxes by replacing cash transactions. In the first year of accepting mobile payments, tax returns in Mauritius increased by 12%. Mobile tax payments are also accepted in Rwanda, Kenya, Tanzania, and Uganda.
It is also becoming more common for governments to make payments directly to citizens via mobile money. Police personnel in Afghanistan get their salaries through mobile banking. Pakistan uses it to pay troops’ wages and pensions. More than 80% of all money transfers from donor entities like nonprofits to private residents in Malawi are now conducted electronically. The government is also shifting payments such as wages and social assistance cheques. The Mexican government can save $1.2 billion annually by switching to mobile money transfers.
India aims to consolidate and digitize its $72 billion in subsidies, welfare payments, pensions, and other transfers. According to the World Bank, the switch is expected to save India around $20 billion, or 1% of GDP.
Even while mobile money was once conceived as a quick fix to a problem, it has now become an integral element in reshaping economies and bettering the lives of millions.
Safer financial transactions
Mobile payment applications encrypt sensitive user data to prevent unauthorized access to financial information. It implies that neither the customer’s device nor the providers’ mobile payment equipment or software will ever have access to the actual credit card details used by the clients. This strengthens the safety of payments while greatly decreasing liability.
Mobile payments can be used for everything, like paying bills and taxes and sending money to family and friends abroad. You can do anything from paying bills and making transfers to checking account balances and reviewing recent transactions to blocking your ATM card, all from the convenience of your smartphone. Mobile money transfers can accomplish everything your bank does, only quicker. It is transforming the financial landscape and quickly becoming the go-to solution for many.