Africa, the world’s second-largest and second-most-populous country famous for its dramatic landscape and diverse wildlife, is well known due to its currency instability for over a decade. Excessive, out-of-control general price increment- Hyperinflation in parts of Africa was a period of currency crisis caused because the national government, in response to increasing the national debt, raised the money supply, thereby causing a significant decline in economic output, exports, and political corruption, coupled with an elementally weak economy.
However, Africa experienced inflation for the first time in the mid-2000s. This was the worst of inflation to occur, which led to the complete abandonment of their currency. During the high point of inflation from 2008 to 2009, it was difficult to estimate the growth rate because the government ceased filing inflation statistics.
In 2009, a few parts of Africa stopped printing its own currency and issued a statement about switching to the United States dollar. This utterly solved the awful complication of lack of confidence in the African money and drove the people to use the foreign currency of their choice. After years of hyperinflation, the use of foreign currencies was finally legitimized. This led to a rapid drop in the utilization of African money- spurring thunder in mobile money.
What is Mobile Money?
Mobile money is a mobile-phone based payments system where the user can make a mobile money account to receive, store, spend, and send money from their mobile phones at one hand. Users can pay their utility bills, electricity bills, buy items from shops or online, pay school/college fees, and experience myriads of other benefits without the need for cash. It’s fast, convenient, affordable, and, most importantly, secure as funds are protected by local financial regulations. Users’ identities are retained and checked- making it hard for criminals and fraudsters.
Mobile money agents have been capitalizing on cash shortages by purchasing cash for resale to mobile wallet holders at a premium of up to 50%. It implies that when one is trying to access funds through a mobile money wallet, the holder gets a fifty percent discount off balance. Cash-out is a process of converting mobile wallet balances into hard cash, whereas cash-in is a way of depositing cash into a mobile wallet. Mobile money agents initiate these processes and techniques. These agents have to go to the banks and get funds against their balance. This process is referred to as “float.” Therefore, these agents act as mini banks by making easy deposit or withdrawal of cash (both cash-in and cash out respectively) by account users from mobile wallets.
As banks limit how much cash can be withdrawn and card payments require extra charges (and not every shop or vendor accepts cards), MMTs or mobile money transfer is a boon for people out there. Mobile money platforms (such as MTN mobile money, EcoCash) provides services of converting digital money into cash so that people can purchase some goods and services at a cheaper rate or only with hard currency. Plus, it helps in economic development through employment opportunities and financial deepening. It also creates a positive impact on the economy and helps stabilize inflation. Being easily accessible even in remote or isolated areas makes mobile money a global phenomenon with 168 million active accounts. Over 96% of transactions are done by electronic payment. Platforms such as MTN mobile money, Ecocash, M-Pesa, etcetera were then introduced.
List of top 10 mobile money providers in Africa-
- MTN Mobile Money: It’s a reliable electronic payment facility that permits the MTN mobile money account holders to make easy transactions like sending money, receive it, or save it directly from their mobile phones. Aforementioned, it’s fast, convenient, and affordable. In Uganda, MTN enjoys over half the market sale for mobile money.
- EcoCash: It’s again a phone-based payment solution that provides services to complete financial transactions and microfinancing services from mobile phones without an intermediary, launched in 2011 by Econet Wireless. The company headquarters is in Borrowdale, a suburb of Harare, Africa.
- M-pesa: Mobile phone-based money transfer facility used for merchant payments and other microfinancing services, launched in 2007 by Safaricom and Vodafone group plc. It has since stretched over to other places like Egypt, Ghana, Afghanistan, Tanzania, and southern parts of Africa.
- Tigo-Pesa: Tigo Tanzania’s mobile money platform, Tigo-Pesa, permits customers to transact with people in neighboring countries such as Uganda, Kenya, Rwanda even if they use a different mobile money service to send or receive money.
- Airtel money: Airtel Africa is a supplier of broadcasting communications and mobile money facilities with an active usage in 14 different countries in Africa, mainly in the East, Central, and Western parts of Africa. It provides the usual mobile money services, allows data services, and authorizes mobile voice both nationally and internationally.
- Monzo: It offers all the regular account services and helps in easy and safe transactions. It enables you to budget better- manage your money effectively or just save/hold it. It assists you in receiving your salary, withdrawing cash, setting up direct debits, transacting money, and so much more. It even helps you earn interest on your savings.
- Tkash: Telkom Kenya limited, Tkash is a mobile money service provided by Telkom that allows a wide range of functional solutions for consumers and corporational organizations.
- N26: It’s again a mobile money service provider that helps you manage your bank account, budget properly, keep track of your expenses, and save funds.
- Carbon: With carbon, transferring funds, paying bills at lower prices, getting loans, buying airtime, and investing money becomes such an easy job! It makes it easy to access amazing financial services at affordable prices and in lesser time consumption, making it one of the most used mobile money services in Kenya, Africa.
- Kuda: Like other mobile money platforms, Kuda helps in safe and secure transaction of funds and allows risk-free investments. It assists you in getting loans, buys airtime, and several other facilities. Kuda is Nigeria’s first mobile-only bank licensed by the central bank.