Types Of Mobile Financial Services

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Mobile financial services encompass many facets such as mobile payments, mobile money and mobile banking. Let’s have a look at some of them. 

Mobile banking, by definition, performs actions on a traditional bank account through a mobile phone. While Mobile payments are payment for goods and services using a personal mobile device as the transaction terminal.  

Internet banking can be accessed as a form of mobile financial service where Online banking now includes mobile capabilities. Mobile banking is offered by nearly all of the major banks in developed nations and typically uses a smartphone app to securely perform bank transactions.  

Some banks also offer only informational services using SMS or phone menus. New applications are continually being created to expand and improve internet banking capability on smartphones and other mobile devices. This is also known as online mobile internet banking. 

Then with Mobile money, which is a stored value account that’s accessed from the user’s mobile phone. It’s typically operated by the mobile network operator and managed separately to the user’s phone account.  

Mobile money is popular in developing nations where most people don’t have regular bank accounts (the unbanked population). It offers a form of lite banking as a replacement for formal bank accounts, therefore mobile money and mobile banking become synonymous, and the two terms are often used interchangeably. 

Where the popularity of mobile money service users in areas or regions that don’t have access to branch banking do have reliable mobile coverage. It’s also indicative of the pent-up demand for financial services that were previously unobtainable to the general population. 

Mobile money can help boost the population’s financial inclusion by providing the mobile payments and banking tools to assist in branchless access, financial literacy, product availability, and risk management.  

Financial services provided by mobile devices are affordable, sustainable, secure, and convenient. They contribute directly to increasing the income of the poor via financial inclusion while reducing their vulnerability to exploitation. Bringing more people into the formal financial system is a recipe for growth, development, and increased economic stability.

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