Friday, October 21, 2016

Mobile Banking vs Mobile Money vs Mobile Wallet

These three concepts are interrelated due to the niche where they operate, the fintech world. They are not the same thing but many financial institutions name their apps randomly making each platform appear sometimes confusing. The names however have a ring to them that speaks volume of the concept of being "mobile", on the go. That exactly is what they all have to offer, automating banking and financial transactions on mobile devices. This give users more mobility and flexibility of doing business transactions and other activities at any time and anywhere. Financial activities have grown beyond the traditional banking sector.

On many occasions have mobile money apps being denoted as mobile wallets. The understanding of these different fintech platforms seems to elude people and organizations who have found it hard to give any clear definition to their apps. The
submission here is my explanation (with examples) after sampling, researching and making meaning of the available platforms that offer (or claims to) the different services. There is a clear and sometimes loose distinctions about their modus operandi.

Mobile Banking:
As the name suggests, this is banking activities done with a mobile device. With mobile banking you are able to use your mobile phone to connect with your bank accounts and manage financial transactions using those accounts. What do you do at a bank? Probably ...
  • Register for a new bank account; Request for your account balanceMake withdrawals over the counter; Make deposits over the counterRequest for your account history and lots more. 
The service would vary depending on what kind of account you have - savings, current, loan, credit etc. These are activities that mobile banking apps render to people out-of-the-box. No need to get into a bank to do all that anymore. Do-It-Yourself (DIY) wherever you are is the trend, yeah, the new cool!
Banking apps require internet-enabled phones in order to access the goodies. However, USSD banking is a fabulous alternative to just that, no be everyone dey use smart phone in fact my own phone no smart. For wholesome financial inclusion, USSD is available anywhere, anytime so far there is mobile network coverage on your basic phone.

Aim of mobile banking is to decongest the banking halls by reducing frequency of customers since they can handle many of their banking activities by self. 

Ex mBanking Platforms/Apps: most Bank apps.

Mobile Money
This is your virtual money using a mobile device, it converts cash directly into digital money. On the contrary, you can own a mobile money account without a bank account. For example, opening a mobile money account with MTN or eTranzact's PocketMoni is with a mobile money enabled SIM or your phone number respectively. 
Mobile Money is typically used for mobile based accounts offered primarily to the underbanked and unbanked. It draws basically from deployments where mobile network operators have offered accounts to their subscribers. 
You may need to walk into a bank to fund your mobile money account but it is never necessary as different means of depositing abound. The fund in your mobile money account can be used to shop anywhere your platform is recognized and accepted.

Aim is to reduce the level of cash handling, this leads to relative security in finance and at the same time improves flexibilty and options available for the modern-era business transactions. more importantly, the unbanked populace.

Ex mMoney Platforms/Apps: PocketMoni, Quickteller, U-Mo

Mobile Wallet:
You can as well infer what this platform stands for from the name "Wallet". What do you do with your physical wallet? Probably you use it to hold some flat and presumably light materials such as a wad of cash, complimentary cards and of course Credit/Debit cards etc. Mobile wallet is an electronic wallet (a mobile app) designed for use on mobile phones.

  • Firstly, this term is used in some instances where financial companies, banks and others give customers platform to have a mobile money account. Since money is kept in this account just like a physical wallet, they are thus referred to an mobile wallet as well. In this situation not a holding different cards but fund, remember your physical wallet can still hold wad of cash.
  • Another explanation for mobile wallet is given in this scenario, using myself as an example. Within my leather wallet resides Debit/ATM cards and I carry the wallet along with me all the time. I may decide to use GTBank card for this transaction or First bank card for the other. With the disruption ongoing in the financial sector, I do not have to carry cards about, Meaning? All my card details can be stored electronically in an e-wallet since I also go along with the phone with me everywhere. This allows my physical card to at least rest, abi? and free up space for other what-nots in my physical wallet. The most interesting part is I can decide to use whichever one suites my purpose from the mobile wallet directly by a mere click to pay for any service on the spot.
Generally, mobile wallets can be used on a website, with NFC (Near Field Communications) payment techs or depending on the architecture at bookstores, malls, cinemas, etc without fumbling to remember as many PINs as possible. You may use a general and well secured PIN to access you cards from your e-wallet, this time it is no more your posh leather wallet. It makes you work, walk and transact smartly and confidently like the cool person that you are.

Examples are:   Google Wallet app, eTranzact WebAccess, PocketMoni, InterSwitch Connect.

How they are Inter-related

  • A mobile bank and mobile money user can still use a mobile wallet ( and if issued a card).
  • A mobile wallet user must have at least either of a bank account or a mobile money account.
  • A mobile money user doesn't need a bank account before saving money with the operators.
  • A mobile money user can fund his/her account using a mobile banking platform and vice versa.
  • Mobile banking is banking activities-centric while Mobile Money is payment-centric.
  • Mobile Money is typically used for mobile based accounts offered primarily to the underbanked and unbanked.
  • Mobile Wallet could be an electronic wallet where you:
    • Keep your money for further transactions, or 
    • Store your different credit or debit card details for easy retrieval during transactions
  • Mobile banking is primarily aimed at creating a D-I-Y service to customers which in turn automate jobs and reduce work off banking officials.

Financial activities are beyond the traditional banking sector in this century, even now that more competitive and better financial technological solutions are flooding the market. Banks are not getting left behind so the need for adaptation, adoption and aggressive creation of fintech services such as online loans, banking apps, USSD Banking etc.


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