Mobile Money - Transfer Money Pay Bills on Mobile Phone

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Mobile Money is a payment solution that enables users pay for goods and services with their mobile phones. Mobile Money is one of the e-payment solutions available to Nigerians in a cashless Nigeria. It is at the core of the CBN’s cashless or cashlite Nigeria policy. In this article we will look at mobile money in Nigeria.

Join us after the break for more on mobile money.

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A number of providers have already been licensed by the Central Bank of Nigeria, CBN, to offer mobile money in Nigeria. Some are already rolling out services while others are planning to do so. So, far the mobile money services we have heard of include MTN Mobile Money, U-Mo Mobile Money, PocketMoni, and QikQik Mobile Money.

Notice that we have ignored Glo Text Cash, this is because there is very little information about the service on Glo website and even our email to Glo have been ignored for nearly 2 weeks, so we will assume it is not ready yet. Note that operator branded Mobile Money services like that from MTN and Glo are simply value added services as network operators are not licensed to operate mobile money services. Mobile Money services from MTN and Glo run on the U-Mo Mobile Money platform.

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 autorised 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, Hi TV, MyTV, PHCN bills, etc.

You can also withdraw cash from your e-wallet at same locations.
Most transactions like sending and receiving money, deposit, or withdrawal will cost a transaction fee as specified by the service provider. Some services may also charge a monthly rental so, inquire from the mobile money agent before signing up.

So far, there are two types of mobile money implementation in Nigeria the operator branded and provider branded mobile money services.

Operator Branded Mobile Money


Operator branded mobile money service is a value added service offered by a network operator to its subscribers to enable them conveniently pay for goods and services with their mobile phone. Network operators do not have mobile money licenses, but through partnership with licensed mobile money providers, financial intuitions, payment processors, and merchants they can offer mobile money to their subscribers. MTN Mobile Money is an example of an operator branded mobile money offering.

Network operators have an edge when it comes to mobile money, because they own the network and can easily rollout services to millions of subscribers. They can also easily turn their recharge card agents into mobile money agent making it easier and cheaper for network operators to roll out mobile money services.

The major advantage of operator branded mobile money service is that the mobile money application resides in SIM, removing the need for downloading any application and the incompatibility issues that goes with it. All that may be required is a SIM swap if your current SIM is not mobile money compatible.

Because operator branded mobile money resides in the SIM, any mobile phone can use the service, from the cheap N2,000 phones to the highest ends of mobile phones. Expect operator branded mobile money services to outshine their provider branded counterparts.

The major downside of the operator branded mobile money is that you must be a subscriber of the network to use the service. Also operator branded mobile money services launched so far partner with just a few banks leaving out lots of customers of other banks.
For now it is not clear whether one can send money to other mobile money users outside their network or even to users of provider branded mobile money services. However, if mobile money is to replace cash, it must be used to send and receive money across networks and across services. So, CBN should ensure that such an environment is created.

Provider Branded Mobile Money


Provider branded mobile money services are those offered by companies licensed by CBN to offer mobile money services. Because these companies do not own the network, they cannot place their applications on the SIM and will always have to partner with numerous networks to rollout mobile money services.

The advantage of provider branded mobile money is that they are open. Anyone can use a provider branded mobile money irrespective of network. Provider branded mobile money services also partner with a lot more banks than their operator branded counterparts.

The only downside of most provider mobile money services is that they require user to download and install an application. This means that users whose phones cannot run such applications will not be able to use the service, at least in a user friendly way. Most services require Java.

QikQik, PocketMoni, and U-Mo Mobile Money are all examples of provider branded services.

Have you used any mobile money service, what was your experience? Share your thoughts about mobile money services in the comment area.

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