Essay on Benefits Of Mobile Banking And Mobile Money Services

Essay on Benefits Of Mobile Banking And Mobile Money Services

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The world has transitioned into the technological era where the use of mobile phone has become remarkably important to connect people globally. Referring to Aijaz and Heikki (2014), mobile banking is often defined as an enabler allowing banks and customers to interact, while mobile money involves peer-to-peer business. To give an example of what these services offer, it would allow for financial transactions such as balance inquiries, funds transfers, bill payments, and inquiries concerning account history. According to KPMG report (2015), the proportion of users in its service has grown rapidly over the past three years, with the number of global users of mobile banking projected to increase to 1.8 billion people by 2019 compared to 0.6 billion in 2013. It seems likely that the services could be of immense benefit to financial institutions and customers in rural areas, as Klein and Mayer (2011) mentioned. This paper will highlight the advantages of mobile banking and mobile money services by focusing on the financial inclusion in developing countries.
Firstly, financial inclusion is defined as an accessibility to financial services to low income population explained by Mago and Chitokwindo (2014). Concurrently, poverty and disparity still exist in the world, with Kenya being one of the countries that has a financial inclusion index rank 133 from 176 countries, meaning it has a low percentage of domestic credit at 13.12% based on the borrowers and depositors among the commercial banks as Park and Mercado (2015) researched. In addition, mobile payment service is one of the most successful tools for developing nations as Kenya, which has a population of only 1% of the world 's, as well as being a widely used service in the develope...

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...s or view bank statements, a factor absent from the former by Kempson et al (2004). Thus, since the focus of mobile banking services is on people not nominally associated with a bank, a large proportion of the country, further development of financial sectors of, in this case, Zimbabwe 's economy will most likely result.
In conclusion, mobile banking and mobile money have improved financial inclusion in developing countries like Kenya, India, and Zimbabwe for a number of reasons: an user friendly interface; improved accessibility to rural population who has mobile phones; a reduction in gender gap in financial matters and the resulting increase in financial inclusiveness; improved security for customers holding a large amount of cash; savings in transaction costs; improvement to the quality of life of those living in poverty as Mago and Chitokwindo (2014) mentioned.

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