Mobile money and mobile wallets are kind of a big deal in Africa. We have the highest number of unbanked individuals across the world (as seen in this map from the World Bank), but we’re also the largest users of mobile money. As we discussed in our previous blog – How africa is leading the adoption of mobile money – Kenya, Somalia and Uganda are the vanguards of the mobile money movement; a movement that has already been in full swing for almost a decade. What many don’t realise is just how versatile mobile money is, not only for unbanked individuals, but for everyone. Let’s take a look at how mobile money works and eight great uses for mobile money accounts.
Mobile wallets let you bank from the comfort of your mobile phone
A mobile money account is a “wallet” that’s attached to a mobile phone number. Think of it as a virtual bank account. It functions similarly to a bank account in that funds can be transferred into it and used to pay for goods– and all banking is carried out via a mobile phone. The high mobile phone penetration rates in Africa explains just why the mobile money phenomenon has mushroomed. Examples of mobile money accounts in South Africa are Vodacom’s M-Pesa (also a big hit in Kenya) and MTN’s Mobile Money.
All that’s needed to set up a mobile money account is a mobile phone number and a South Africa ID
It’s not just a mobile phone number that a mobile wallet can be linked to. A mobile wallet can also be linked to a prepaid card, allowing users to bank through their mobile phone and transcact with their prepaid card exactly like they would if they owned a Visa card linked to a bank account. Once their mobile money account is set up using their ID and mobile phone number, all they need is a certified copy of their ID to link the mobile wallet to their prepaid card. Not only will they be able to do things like swipe in-store and withdraw cash from ATMs, they’ll be able to buy prepaid airtime and electricity from their mobile phone.
Here are the eight great uses for mobile wallets:
- Kids’ pocket money: It’s important for children to learn how to handle money. Giving them pocket money as cash is risky and could also subject them to theft. A mobile wallet will not only make them feel grown-up, it’ll teach them to be responsible with their money from an early age – before they get a bank account.
- Budgeting: It’s easy to overspend when all your money is in one place – your bank account. By transferring funds over into a mobile wallet you can ensure that you only spend your planned amount on groceries, for example. There’s no risk of overspending with a mobile wallet as they don’t offer a credit facility.
- Unbanked individuals: Mobile wallets allow individuals without access to banking facilities the opportunity to be more flexible in managing their finances. For those in the lower income bracket, a mobile wallet offers many of the perks of a bank account, but at a lower price.
- To pay wages or bonuses: Instead of paying staff with cash, wages can be deposited into mobile money accounts. Not only is this easier, but as an employer, you’ll save the fees you’d incur by weekly trips to the bank to withdraw large amounts of cash.
- Gifts: A few decades ago, a Grandmother might have given their grandchild a few notes or a cheque in a birthday card as a gift. Today, giving the gift of cash can be done through a mobile wallet. Not only is it safer, but the recipient can then use the mobile wallet for years to come.
- Corporate expenses: Managing corporate expenses like travel, accommodation and petrol can involve a lot of admin and require staff members to be meticulous about keeping receipts. With a mobile wallet and a prepaid card, expenses can be transferred onto it and then given to the staff member to use.
- Couples living together: Many married and unmarried couples living together might not want to open a shared bank account, but still need a way to efficiently pool resources to pay for rent, groceries and utlities. The problem is solved by one person having a mobile wallet, into which they can both deposit money to cover monthly expenses.
- Prize money: Whether you’re a popular brand running a competition or a company holding their annual raffle, prize money can be given out on a prepaid card linked to a mobile money account. As well as being safer than handing out large sums in cash, it’s more ceremonious too.
To find out more about how card programmes can benefit you or your business, download the Reload brochure.