Mobile money has emerged as a notable financial innovation in recent years. This technology has transformed payment habits globally, especially in areas with limited access to traditional banking services. Through the digitalization of financial services, mobile money effectively addresses challenges related to transaction security, inclusion, and enabling monetary exchanges.
In mobile money technology, Near-Field Communication (NFC) instantly sends encrypted data to Point of Sale (POS) devices which saves time as compared to chip and PIN technology. NFC in mobile devices utilizes proximity radio frequency identification to communicate with card machines based on NFC. The global mobile money industry is gaining popularity due to a rise in the adoption of mobile POS, the surge in the efficiency of mobile money transactions, and the growth in the use of digital payment-based business models.
Futuristic trends driving the growth of mobile money:
The influence of mobile payments reaches beyond every consumer, as small and large retailers progressively incorporate mobile payment technologies into their transactions. The incorporation of this system is more than just a convenience for consumers; it represents a strategic initiative by businesses to improve entire customer experiences and simplify checkout processes.
The shift towards seamless payment alternatives is anticipated to grow, which will contribute to greater customer satisfaction and loyalty. Mobile payments are helping to bridge financial gaps in underprivileged regions by providing essential financial services to those who were previously eliminated from the conventional banking system.
- Multi-factor authentication:
As mobile payment services expand, the risks of security breaches and advanced fraud also increase. To address these challenges, mobile money providers are incorporating multi-factor and robust customer authentication measures. This includes a combination of factors such as one-time passwords (OTPs), PINs or passwords, device binding, and biometrics.
Advanced security measures also include artificial intelligence (AI), data analytics, and complex rule engines to detect anomalies in transaction trends. This proactive approach assists in preventing and detecting fraud by identifying connections among fraudulent users, analyzing transaction behavior, and issuing notifications and alerts to the concerned parties.
- Microservices infrastructure:
A notable technological shift in the mobile payment sector is the widespread adoption of microservices infrastructure. Mobile money applications are breaking down into smaller, loosely coupled services, commonly referred to as microservices.
This modular development approach allows for independent updates to microservices, promoting agility, faster changes, and version rollouts. The architecture also simplifies fault isolation and correction, ensuring the resilience of the overall application even in the presence of specific faults.
- Personalized services: The emergence of mobile money services reflects a shift from broad-based assisted experiences to customized self-service versions. Initially, users needed support and training, and mobile money service suppliers provided full assistance through support staff and agents. As mobile money adoption increased, the industry encouraged the transition toward self-service modes.
Self-onboarding and Digital KYC (Know Your Customer) showcase this trend which enables consumers for mobile money registration as per their convenience, anytime and anywhere.
- Payments-as-a-platform (PaaP): The PaaP (Payments-as-a-Platform) model is propelling the development of mobile money, enabling third parties to offer services through mobile money apps. This approach provides third parties with increased access to users without requiring mobile payment operators to develop additional services.
payments-as-a-platform not only expands the user base for third parties but also generates additional revenue for mobile money operators, addressing the evolving demands of users.
- Cost-effective technologies: Global industries, challenged by elevated inflation rates, are experiencing a revolution in the acceptance of payments. Merchants are using mobile technologies to cut costs and boost sales. The goal is to offer a variety of payment options to meet the shifting needs of consumers who desire fast, flexible, and seamless payment experiences.
- Future of the mobile money sector: The future of mobile money seems promising with continuous Fintech advancements. Blockchain technology represents an innovation with the potential to impact the mobile money landscape. It can make more secure, transparent, and cost-effective transactions. Fintech companies are actively exploring avenues to incorporate blockchain into mobile money services.
With the advancement of AI and ML technologies, we can expect more personalized and secure mobile money services. These technological improvements will not only enrich the user experience but also offer greater confidence in these platforms.
Frontrunner’s strategies to sustain the dynamic sector:
The global mobile money industry is competitive and top entities are adopting novel strategies to sustain the dynamic industry. Government organizations are also making initiatives for awareness of mobile money technology. These strategies involve innovative product launches, mergers, collaborations, partnerships, and acquisitions. For instance, a resolution was issued by the Government of Vietnam to extend the pilot use of telecom payment accounts for small value services and goods until December 31, 2024.
This service enables customers to utilize their mobile communication accounts for payments related to small-value goods and services, as well as for activities such as money transfers, withdrawals at outlets, direct deposits, and transactions at points of service provided by telecom providers in the nation, among various other forms of financial transactions.
Moreover, e& and Ericsson have collaborated to enhance the mobile money service in the UAE. By implementing Ericsson’s FinTech solution, the Ericsson Wallet Platform, e& money aims to enhance the security and reliability of its infrastructure, enabling more effective management of transaction processes.
The Ericsson Wallet Platform is set to offer secure and personalized financial services to a diverse user base through various digital channels. The ongoing modernization and expansion of the platform signifies a crucial moment in the evolution of e& money, reflecting its objectives to transform into a comprehensive financial app.
To conclude, mobile money technology has revolutionized payment methods across the globe. Prominent trends like multi-factor authentication, payment-as-a-platforms, and personalization are fueling the growth of the mobile money sector. However, government initiatives regulatory support, and the emergence of blockchain technology will open new avenues for the industry in the upcoming years.
Short description:
Mobile money has streamlined the transaction process in areas with limited access to conventional banking services. The industry is experiencing growth due to personalization, payment-as-a-platform, and multi-factor authentication. Furthermore, blockchain technology integration will offer prolific opportunities for the sector in the upcoming era.
Author’s Bio
Koyel Ghosh is a blogger with a strong passion and enjoys writing in miscellaneous domains, as she believes it lets her explore a wide variety of niches. She has an innate interest in creativity and enjoys experimenting with different writing styles. A writer who never stops imagining, she has been serving the corporate industry for the last five years.
