The race for customers could become even tighter between banks and telecoms as financial institutions move to claim masses that were lured by mobile money services. The banks are adapting new technologies to enable them stem competition from telecom firms, which provide mobile money services. Mobile money service has been a thorn in the flesh of bankers after it became the choice of many ordinary people, especially in areas that have no or limited presence of banks. Therefore, the rush by banks to adapt the mVISA facility has been seen by sector players as an effort to curtail the growing telecom operators’ mobile money market.Most rural folks prefer mobile money services for their day-to-day transactions, which has pushed the banks to rethink their positions."It’s much easier for my parents to send me money using the mobile money service whenever I ask for pocket money or want to pay medical bills,” said Angel Mutamba, a secondary school student in Matimba in the Eastern Province. Her parents live in Kigali."My parents send the money to my class teacher through the mobile money agent at the school canteen. This is more convenient than having to go to the bank,” she explained.Mutamba’s case represents that of many other people who depend on the cost-saving and timely facility to transact businesses.With the rollout of mobile money agents countrywide and introduction of innovative products that offer timely money transactions, many people prefer mobile money to using banks. With Tigo Rwanda’s latest mobile money innovation, for instance, a mobile money subscriber in Rwanda can send or receive money from a Tigo subscriber in Tanzania or the DR Congo, where the operator has presence.MTN also launched an online mobile money platform in June last year in a bid to help subscribers receive money from Diaspora directly on their mobile handsets.Airtel money, the latest telecom operator to offer the service, is unique because of its ability to provide inter-switch systems that make it possible for a mobile phone owner to access their bank accounts around the clock.Inter-switch is an integrated mobile platform, which gives real time and online transaction switching, helping a mobile phone owner to access his or her bank account using their mobile phone.National Bank of Rwanda (BNR) statistics indicate that as of March this year, over 1.7 million subscribers were registered for mobile money. The figure was at 639,000 subscribers at the end of last year, with MTN Rwanda having pushed over Rwf90b through the platform. "The mobile money service is helping to expedite operations as people can now pay for services using their phones,” John Rwangombwa, the central bank governor said in an interview with Business Times.He noted that most stakeholders in payment systems stepped up efforts to boost their businesses, leading to the 125 per cent increase in mobile money subscriber base.Utility service providers such as the Energy Water and Sanitation Authority (EWSA) have partnered with mobile money service providers to ease payment systems and concentrate on their core businesses. "Mobile money is improving our payment systems and, in the future, we shall see less and less cash within the economy as more innovations are implemented,” sector experts predicted.So the move by banks to embrace the mVISA facility, which operates like the mobile money platforms used by telecoms, should be viewed as a way to try and gain customers and extend their presence in hard-to-reach areas across the country.So far, Bank of Kigali and Urwego Opportunity Bank have deployed the facility to tap into opportunities it presents, especially for rural banking.Visa country director, Ginger Baker, believes that the mVisa has the ability to share its infrastructure and ease the cost of mobile payment systems among players to boost access to financial services in the country.She said unlike other mobile money platforms, mVisa gives the account holder access to financial services from any mVisa agent or merchant regardless of financial institutions or mobile money providers, something that will boost Rwandans’ mobile banking preference and increase financial inclusion."It means that if I have an mVisa account, I can go to any mVisa merchant anywhere and withdraw my money,” Baker pointed out."Rwanda’s future is mobile. If you take a look at the number of bank branches across the board, they are too few compared to mobile money agents. So, there is more mobile phone penetration in the country. This means that anyone who wants to dominate the financial sector must think in terms of adapting technologies that use phones to expand their reach,” said Patrick Nsenga, a mobile phone software programmer and content developer at kLab, a computer innovations incubation centre in Kigali.Statistics from the Rwanda Utilities Regulatory Authority (Rura) indicate that mobile phone subscribers shot to 6,039,615 in March this year from 5,902,630 in January, meaning a monthly increase of about 8.14 per cent and close to 60 per cent of the population using mobile phones. These numbers present huge opportunities to banks as well as the telecoms industry.The two banks that have embraced mVISA are offering services free of charge to improve their competitive edge against the telecoms."The Bank of Kigali mVISA is a digital wallet that allows one to deposit or withdraw cash, send money, top-up airtime, pay bills, buy items and check account balance at no cost,” said Lawson Naibo, the bank’s chief operating officer while launching the product last month.Naibo was optimistic the innovation would leverage on the increasing levels of payment services in Rwanda and use mVISA agents to make its products and services accessible to the masses, especially in the rural areas.Urwego Opportunity Bank, which launched its mHose mVisa platform in April, has so far registered 4,600 customers, transacting over Rwf200m to date, according to officials.Jeffrey Lee, the bank’s chief executive officer, said more than 50 bank agents were already using the platform countrywide.Analysts forecast a competitive market in the future, calling for partnerships. Rwangombwa said partnerships were critical. He also noted that customer protection and education were important to strengthen the capacity of the two competing facilities."The central bank has identified raising financial literacy and up-time level as strategies to step up customer service and protection to foster collaboration between comapnies, telecoms and banks to enhance connectivity and institute a monitoring system,” BNR said in a statement.In some parts of Africa, unconventional collaborations have benefitted consumers. In Ghana, for instance, MTN is offering life insurance, which Urwego Opportunity Bank’s mVISA also offers, to mobile money customers. While in Kenya, Safaricom’s M-Pesa enables users to save and borrow money through their cell-phones. Eligible customers also qualify for emergency loans.It is, therefore, very clear that beyond financial inclusion, these innovations offer the opportunity to stimulate economic growth, experts argue.Rwanda was ranked among the eight fast-growing mobile money economies globally in a recent report by GSMA on mobile money adoption.According to the GSMA’s Mobile Economy 2013 report, globally, more than 2.5 billion adults do not have access to a formal bank account and are not able to access basic financial services in order to save, borrow or transact.However, the report states that the increasing levels of mobile penetration (there are 3.2 billion mobile phone users worldwide) presents a significant opportunity for financial inclusion for the world’s unbanked, through services such as mobile money."We are moving towards a cashless economy and the use of mHose mVisa mobile banking will help us reduce the queuing at banks and provide timely solutions to customers,” Lee noted.As the scramble for customers becomes fierce between banks and telecoms, the one that will provide the best customer experience, low transaction costs, the security features and how much a service can offer will take the day.