A lot of people use the term “mobile money” to describe what companies such as Paga are doing. In some ways it is an easy way to designate and show the mobility of money on electronic systems. However, I have concluded that this designation is indeed confusing. It makes people, many of whom are used to cards and thus electronic forms of payments, stop and think “what is mobile money?” – then go further and conclude – “oh its tied to my mobile phone – that must be it.”
An even worse trend is referring to companies such as Paga as a “Mobile Payments” company.
Arguably since 1958 when the first credit card was invented money has been mobile in terms of mobility. But when using my Visa or MasterCard I don’t think of it as electronic money or mobile money I simply think of it as money. Hard cash. Why is it different now??
Paga, Paypal, Visa, MasterCard all allow you to access your cash from a variety of channels.
- With Paga, you can access your cash via GSM (SMS initiated), an application on your phone, online, or at an Agent.
- With Paypal, you can access your cash via exactly the same channels as Paga, with the exception of the agent channel (although most people think of Paypal as just an online service). I have the Paypal application on my blackberry in Nigeria and use it from here…
- With Visa or MasterCard, you can access your cash via a plastic card, online, and mobile phone as well. I have a NFC phone that carries a US Visa Card and US MasterCard (also has a Paga card)…
As you can see from above, there is pretty much no difference in the way these companies deliver access to their customers’ money. Our business models are quite different but in the end, all we are doing is providing an electronic channel to make money accessible. I recently bought an IPOD wristwatch for a friend – the day that wrist watch has internet or GSM access we will deliver Paga from that watch.
Truth is there is nothing new about the problem we are trying to solve. The problem is simply – how do I pay someone for a good or service or give them something of value? Indeed the problem has existed for centuries, and the first dramatic solution came in 5,000 BC when metal objects were introduced as a form of cash.
The other issue with the terms “mobile money” or “mobile payments” is the over-dependence it seems to give the Telco networks. Yes the Telco networks are important for the delivery of our service, but as shown above, they are not the only channel.
Thus, I contend that we should kill the terms “mobile money” and “mobile payments”! They only seek to confuse. Let’s focus on the substance, companies such as Paga are making money available electronically via various channels and in so doing democratizing access to finance by leveraging a business model that is cheaper and more scalable in an Emerging Market than what a traditional Bank or Visa/MasterCard can offer.
I just got asked what alternate term to use. I don’t see a reason for any term. When I use my Visa card I don’t say I am using plastic cash (fine you say debit or credit card, but not to refer to the cash). Its still cash. If pushed for a term then I suggest “electronic payments” grudgingly because for us at Paga our business goes beyond that. At Paga we simply think of ourselves as a Financial services company and our mission is to deliver innovative and universal access to financial services across Africa!