Mobile banking is a broad term used to describe any method through which a mobile device, such as a cell phone, can be used to access the services offered by banks and other financial institutions. These services can include paying money to retailers and vendors, transferring money to friends and family members, and depositing money into a bank. Most of these services are run directly by mobile phone service providers, meaning that nearly any customer of a major mobile phone carrier can access and use mobile banking services.
WHY IS MOBILE BANKING BENEFICIAL?
Mobile banking makes transactions easier and cheaper. Once a mobile banking account has been set up, there is no need to visit a physical bank to deposit or withdraw money. This also means that small loans can be taken out and repaid via mobile phone, making loans easier to obtain, especially for people living in more rural areas. The spread of mobile banking has also decreased the cost of taking out loans or keeping money in savings accounts for many people, as banks do not have to spend as much on running physical banks, and charge lower fees as a result. Being able to access financial services remotely also saves the time and money costs of travelling to make transactions in person.
Furthermore, mobile banking is accessible. With a large majority of Africans possessing mobile phones, most people now have easy and rapid access to banking and financial services. Certain regions which do not have a nearby bank are now able to instantly deposit money or take out loans. Women have also benefited greatly from the development mobile banking. By being able to have personal and unrestricted access to bank services, many women have been able to save up money for themselves, and many others have developed their own business ventures through mobile loans and transactions.
IS MOBILE BANKING SAFE?
Mobile banking is also very safe. The exchange of money over mobile networks is no different than the use of physical bank notes, and any money deposited in a bank account by a mobile payment can be redeemed at physical banks and other cash vendors for bank notes. In fact, using mobile phones to send money is often easier and safer than in-person transactions, as there is no need to carry physical banknotes, and it is much harder to lose money stored virtually.
The money sent and deposited by mobile banking is not held by the mobile phone companies. Instead, it is transferred and held by banks that are regulated and monitored by both mobile phone companies and national governments. Transactions, such as payment of salary or repayment of loans, are also more transparent when sent via mobile phone, decreasing the fraud and theft that may occur when physical money is exchanged between hands.