That Thing Called Mobile Money: Do You Get it?

The word alone confuses. I don’t know who is more confused. Is it the users, the regulators or the operators of the services? What I found in my research for this piece is that there is no agreement on what Mobile Money is by definition.

Mobile Money is simply the ability to carry out a transaction using your mobile phone.

Unmasking Mobile Money

There are different ways that this service is being offered by the different providers. Instead of engaging in too many jargon, I will keep it as simple as possible.

Mobile Money will provide opportunity for people who have mobile phones to transfer money, pay bills and top up their credit. It’s not a must to have a bank account before you can operate one. Your name and your phone number is enough to open a basic mobile money account.

It is important to know the identity of people carrying out a transaction. Mobile Money service providers are under the watchful eyes of the Central Bank of Nigeria and there are standards they must obey in order to protect their customers and prevent fraud.

I have noticed a pattern. There’s a limit placed on the amount of transaction you can do at a time if you have not been properly verified. Going through two of the mobile money Operators that are licensed in Nigeria, I saw three levels of customers with three different limits;

  1. Allows you maximum transaction limit N3,000 and daily limit of N30,000
  2. Allows you maximum transaction limit N10,000 and daily limit of N100,000
  3. Allows you maximum transaction limit N100,000 and daily limit of N1,000,000

There are requirements to qualify for each of the levels. There are those who do not have a valid ID card. Those people won’t be able to open a bank account but will fall under the first category. They can open the basic Mobile Money account.

The Mobile Money Ecosystem

The Mobile Money Ecosystem consists of the Mobile Money Operator, Regulator, Partner Agents and the users.

The Mobile Money Operator provides the service and are given licence by the Central Bank of Nigeria to run the service. In this case, they will have to strike partnership with Mobile Telecom Operators and other service and product providers.

Partner Agents are the ones that are responsible for receiving and paying out cash. They perform some operations as it is deemed fit by the Mobile Money Operator. In most cases, they also registers new users, help them carry out a purchase – in case the customer is not registered. Unregistered Mobile Money customers can receive and send money using a partner agents account. As long as the receiver has a phone.

It is important to check the frequently asked question and the guide of the Mobile Money Operator you choose, as they can vary slightly in the way they execute it

The customers include those that want to transfer and receive payments. Companies can register with Mobile Money Operators in order to receive payments from their customers that are Mobile Money customers. Bills can be paid using mobile money depending on if those agencies are registered with the Mobile Money service Providers.