Senior Mobile Analyst at WorldRemit Alix Murphy has said mobile money will play a pivotal role in global remittances and help to reduce fees, improve speed and convenience for users. In an interview with The Nation, she says mobile money remains a key of financial inclusion and getting financial services to the unbanked. Murphy says there are two-and-a-half billion unbanked people in the world and that one billion of these people already have access to a mobile phone, a potential means of accessing financial services, reports COLLINS NWEZE.
For the Senior Mobile Analyst at WorldRemit, Alix Murphy,mobile money remains the main or only means of accessing financial services. She said Nigerians in Diaspora are famed for their generosity, and keen adopters of new technologies including mobile money services.
She said Nigerians are among the first to really embrace the technological revolution in money transfers. Using convenient online and mobile services, they are very likely to sustain the record in sending remittances.
She said WorldRemit has been supporting commercial relationships with telecoms operators all over the world, as well as promoting mobile money opportunities in developing countries, including Nigeria.
Murphy, before joining WorldRemit, was the market intelligence analyst for the Groupe Speciale Mobile Association (GSMA), where she analysed trends in mobile money and digital identity and consulted mobile operators on revenue opportunities.
“That’s why WorldRemit has worked hard to connect to more mobile money services than any other money transfer firms,” she said.
Global prediction
Murphy reiterated World Bank’s prediction that the number of international migrants is expected to exceed 250 million this year. “So we shouldn’t be surprised that as long humans continue to go abroad for work or family reasons, we will continue to see increasing volumes in international remittances,” she said.
She said that remittances create opportunities and that in Nigeria, as elsewhere in Africa, there is a huge appetite for business and there are countless examples of Nigerians receiving money from relatives abroad which they used to finance or set up small businesses at home.
“Let me look at this from the perspective of international transfers: the Groupe Speciale Mobile Association actually noted that the average cost of sending money internationally using mobile money as a receive method was $4. That’s less than half the cost of sending money internationally to Africa by traditional money transfer firms,” she said.
On how to boost mobile money businesses, he advised: “Establishing trust among customers is important for all financial service providers. Both banks and Mobile Money services have an important role to play in increasing awareness about the enhanced security and protection that digital financial transactions can bring. Cash is anonymous, whereas digital transactions necessarily have an audit trail from end to end, not to mention increased speed and reliability,” she said.
Mobile money model
On the right mobile money model needed by Nigeria, Murphy said every country has its own unique context which impacts the ability for Mobile Money to thrive. “Most of the successful Mobile Money services involve some type of partnership between banks and telcos, but one important thing to remember is that Mobile Money requires significant investments in technology, agent training, marketing, and customer education in order to succeed. We partner with both telcos and banks that have made this commitment to investing in customer education,” she added.
She advised Nigerian shareholders not to be in a hurry to reap from mobile money businesses. “Shareholders who invest in Mobile Money must understand the very different dynamics of this industry compared to typical banking or telco services. The most successful Mobile Money services in other countries took several years to become profitable, but their shareholders made long-term investments which required patience and dedication in order to establish an excellent service,” she said.
Poor network quality
On tackling poor network in the industry, she said Nigerian operators should look to countries like Somaliland, Kenya, or Zimbabwe for a sense of the overwhelming success of mobile money services. “Clearly, there are major incentives for telcos to invest in network infrastructure. There is no doubt that investments in robust and resilient systems, as well as adequate customer education about coverage and network safety will ultimately allow telecom operators to drive mobile money adoption rates,” she said.
Murphy said WorldRemit is looking at telcos, banks, and regulators to work in unison for a more inclusive financial services environment. “The World Bank noted that Mobile Money has contributed significantly to an increase in financial inclusion in East Africa, and we expect to see similar impact as Mobile Money services grow in other regions. There are a number of instructive learnings from other African markets,” she explained.
The company, she said, wants to enrich people’s lives by giving them the power to share money with friends and family – anytime, anywhere. She said traditional money transfer companies, with their brick-and-mortar business model and agent-exclusivity arrangements, have long since overcharged customers, while delivering an appalling customer experience.
“WorldRemit is an online service that lets people send money to friends and family living abroad, using a computer, smartphone or tablet. It is a convenient, low-cost alternative to traditional money transfer companies that use high street agents and charge unreasonable fees.
Around the world, WorldRemit offers customers the option of receiving money as airtime top-ups, bank deposits, cash pick-up, or Mobile Money. In Nigeria, WorldRemit currently sends to most major banks as well as providing airtime top-ups for phones on Airtel, Etisalat, GLO, and MTN,” she said.
Expansion plans
Murphy said that WorldRemit’s international business development team is already working with existing and prospective partners on the ground in Africa. As the business grows, we will most likely devote more and more resources to fast-growth markets.
“As a business, we are growing incredibly fast and we now have more than 180 employees around the world. It’s important to make sure that we continue to work as smoothly and effectively as we have done in the past.
“WorldRemit is shaking up the money transfer industry like no company has done before. We are working hard to launch our service in more and more countries, including the United States, where many Nigerians live. We are also adding more receive options.
“For our existing and prospective customers, that means they will get to use a service as convenient and innovative as no other. In five years, we expect that, by and large, customers will be embracing the convenience of sending money online and from Smartphone to Mobile Money services – a true mobile-to-mobile experience,” she said.
World Bank position
World Bank said Nigeria received $21 billion last year, accounting for two-thirds of all remittances to sub-Saharan Africa, an online money transfer service.
The global lender said Nigeria remains among the world’s largest recipients of remittances and that remittances to the region are projected to reach $36 billion in 2017. In 2013, remittances financed one-third of the country’s imports.
In an emailed report titled: How Mobile Money will Power Global Remittances, it said global remittances will grow slowly this year, but accelerate again in 2016 and 2017.
Furthermore, it said global remittances will this year, reach $586 billion at a slower growth rate of 0.4 per cent due to economic conditions but will accelerate again to reach an estimated $636 billion in 2017.
The lender said fees are far too high and that the average cost of sending $200 to sub-Saharan Africa remains at 12 per cent of the amount, higher than the G20’s target of five per cent.
This, it attributed to the cost of bricks-and-mortar agent networks of traditional firms. “There is a huge potential for mobile technology to reduce costs on both the send and receive sides,” he said.
According to the global lender, mobile money will grow to play a huge role in remittances and help to bring down fees.
“Worldwide Mobile Money usage is exploding with 261 mobile money services now live across 89 countries with 103 million active users as of December 2014. More than half of these services currently in operation are in sub-Saharan Africa,” it said.
Mobile money helps to reduce remittance fees, adding that the median cost of sending $100 via Mobile Money is $4, less than half the average cost to send money globally via traditional money transfer channels.
Benefits to consumers
Some of the benefits to the consumer include security, convenience, accessibility, speed and ease of transaction, competitive charges, access to quality advisory services, and integrity of transactions; the customer literally carries his bank in his pocket or bag wherever he goes.
Other not-so-obvious benefits, which are nonetheless important, are better cash flow management, enhanced financial planning, and inculcation of sustainable savings habit, which boost financial security and comfort in retirement.
“Mobile payments, which I perform on my phone, help to reduce my travelling costs,” a farmer in rural Nigeria who uses mobile payment services said.
Mobile money also has the potential to galvanise economic activities, leading to higher socio-economic development, lower cost of transactions and reduction of cash handling costs, among other benefits.
Role of regulators
The Central Bank of Nigeria said over the next few years, the focus of the regulator will be to strengthen the institutional and regulatory frameworks to achieve improved financial inclusion. The application of mobile technology for financial services especially in rural areas will ensure that a large percentage of the population outside the formal banking system would have access to financial services using one of the three models of card-based, account-based and virtual account.
Nigeria’s telecoms subscriber base, put at 131 million as of last September by the Nigeria Communication Commission, should play a major role in bringing the unbanked into the formal banking system.
With over 50 per cent of Nigeria’s adult population unbanked, mobile banking could be the catalyst that will help quicken the adoption of banking services by this critical segment of the population.
Mobile money is the next thing expected to pex bank said.
