The ping of a text message has never sounded so sweet. Mobile money is expected to revolutionize banking in a continent where more than 80% of people, are excluded from the formal financial sector. Apart from transferring cash, a service much in demand among urban people supporting relatives in rural areas, this service will help people have virtual accounts on their handsets. Mobile banking was started by Globe Telecom and Smart communications in the Philippines in 2005 and closer home in 2007 Safaricom, the leading mobile communication provider in Kenya, started M-Pesa. The service is yet to be imitated by any of the telecommunication companies in Rwanda though mobile banking is going on in the circles of many Kenyan expatriates living in Rwanda. The partnership between MTN Rwanda cell and Safaricom has enabled this service to operate in Rwanda. Steven Njoroge a Kenyan engineer living in Nyamirambo expressed great satisfaction for the M-Pesa service though he admitted being skeptical at first when it was first introduced. He says “My family in Nairobi depends on me for them to put food on the table, so each month I have to send money home”. On most occasions, he used to send money using postal money orders, but this can be a slow process, which used to cause him a great deal of inconvenience. “Before, I used to take risks and put money in envelopes and give them to bus drivers to deliver,” he said, adding “I have lost cash this way in the past but I cannot claim a refund as it’s just a gamble.” Sending money through a mobile phone is simple and very cheap. There is no need for a new handset or SIM card. To send money you hand over the cash to a registered agent typically a retailer who credits your virtual account. You then send an amount of money not more than Rwf 400,000 via text message to the desired recipient, who cashes it at an agent by entering a secret code and showing ID. A commission of Rwf1500 is paid by the recipient, but it compares favorably with fees levied by the major banks, whose services are too expensive. Apart from sending money to loved ones, mobile banking has enabled companies to pay salaries directly into workers’ phones. Moving with large amounts of money is now a thing of the past. There have been concerns about security, but if your phone is stolen before you send the money, then the PIN system prevents unauthorized withdrawals as the PIN code is only known by the owner. The only danger is sending cash to the wrong mobile number and the recipient redeeming it straight away. The dominance of companies dealing within international cash transfers such as Western Union and money gram is slowly diminishing and now people prefer mobile banking which is faster and cheaper. Africa is the largest beneficiary of this service judging by the huge migrant workers working abroad who send money back to their home countries for their relatives. The mobile technology is looking to tap these transactions and make profits from them. dedantos2002@yahoo.com
