CFI Blog

Mobile Money’s Newest Outpost

After 1997, when the internet connection was released for the common public, it ushered in an era where business and transactions became digitized and began to happen more online. Since the internet’s earliest days, more than three billion people have been using the internet, but the Internet growth hasn’t been equal. So naturally, the expansion of banking through digitally modified platforms has been hindered because of the unequal spread of the Internet infrastructure. 

According to recent studies, more than a billion people worldwide, especially in developing countries and emerging markets, have access to mobile phones but don’t have a bank account. Due to the poor expansion of banking services, numerous people, including a majority, have no option but to store money in informal storage and shadow networks.

However, digital money is making its way to the mainstream populace. In Africa, where there isn’t any physical infrastructure like roads or methods of transportation and source of energy like electricity, physical branches are not possible. Moreover, fifty-eight percent of Indian women report difficulty accessing credit savings or jobs because of gender. The digital banking system is filling the gap between the physical and offline branches. To date, 100 mobile money companies and digital banks that captured the African markets. Out of those, 84 companies have started in the last three years. 

Due to Africa’s depredated economic conditions, only a few have reached sustainable scalability. Some scalable sustainability companies include M-pesa in Kenya, FNB in South Africa MTN Uganda, Vodacom Tanzania, GCASH, and Smart Money in the Philipines. But even these companies haven’t much traction and publicity outside of the fundamental transfer and receiving funds facilities. Expanding digital banking forms the basis of tackling five challenges to accelerate financial inclusion. A survey was conducted on these companies to determine the reasons for their success. The survey revealed and watered down three reasons for their success:

  • They invest heavily in the management of agent networks. 
  • They pay close attention to product design.
  • They maintain a diligent corporate commitment. 

Managing the Agent Network

Managing the Agent Network

Maintaining an agent network is essential; agents are the ones who approach the customers and account holders to explain the benefits, take the details of the account holder, and send them to the management where their accounts can be set up. Agents also process the cash-in and cash-out procedures that enable the transfer of funds from one account to another. 

The foundation of the application operation depends on the app’s efficiency in which people conveniently transfer money to one another. This means that the agents can destroy or reinforce the company’s reputation. Numerous companies build their agent network in haste without paying close attention to their structure, business care, and profitability. This is a common mistake that most companies make. 

Making an agent team without consideration or setting up proper management can lead to miscommunication. Some grow their network too fast, and some companies keep it too small and need help to handle the strain and pressure. It is time to ditch impact investing and unproductive self-analysis. A few tips for managing this problem are: 

  • Grow your customer and your agent network simultaneously. 
  • Understanding the agent management tactics–which can be challenging to navigate.
  • Enrolling the best people with fluent communication skills as the agents to facilitate customer acquisition. 

Grow the Network of Agents with Your Customer Base

Establishing a network of agents is a company’s first and most challenging job in its journey. The company has to distinguish between employing too many and too few agents. If the company employs to few agents, the system will not be able to handle the customers’ demand. The system will not be able to take the pressure and eventually collapse. 

If they have fewer businesses, the company can pay for the expenses. The company will not have the necessary liquidity and eventually lay numerous people off. To ensure sustainability and stability, the company must have the appropriate number of agents to cope with customer demand. They have to determine the scale of how many agents, such as adjusting the number of agents per 1000 transactions. 

Understanding Agent Business Case

Understanding Agent Business Case

This is a crucial mistake most companies make while hiring or collaborating with agents. Most companies need to ensure the profitability of the agents, which forms the foundation of the digital transactions business. Many financial and business experts say the agents take two or three years to gain and maintain profit.

However, Agents have to handle 30 to 50 transactions on average. Understanding the business side of the issue means being knowledgeable about the day-to-day activities of the agents. It also means analyzing their activities and attending to their needs, if necessary, coming up with impeccable solutions to their problem. 

Invest in Agent Quality

Investing in agent quality ensures the business’s reputation and restores faith in the service. A qualified agent will maintain the liquidity to remain solvent over the period. They must also have excellent communication skills to explain their services and remember training exercises. 

Mobile network operators tried outsourcing their agent hiring program to third-party companies but failed. In addition to hiring qualified staff, the company must ensure facilities for the infrastructure of training. Also, the company must tend to the needs of employees to increase employee retention. 

Marketing Product Design

The fundamental step in product design is to build an interface with which even the most non-tech-savvy customer can access the application as quickly as anyone else. The first step is to thoroughly assess the customer’s needs and devise a system to address those needs. According to different studies, the African company M-pesa did precisely that. When M-pesa offered the citizens of Kenya a more straightforward, secure, and effective way to transfer money from one account to another, they understood that there was a market gap, and people demanded this product. 

M-pesa went for the opportunity and became a pioneer in this field. Now this company operates in 15 African countries, including Egypt, Tanzania, and Uganda. Some companies can target different niches like point-of-sale, agriculture, business-to-business transfer, mobile bill payment application, etc. 

Frequently Asked Questions (FAQs)

Q1. What is a money mobile?

It is a financial service that partners with mobile network companies that connect their numbers with banking accounts to transfer money from one person to another. No bank accounts are needed. 

Q2. How to apply for mobile money?

You must approach a mobile networking agent. You will need an accepted valid form of identification, such as a driver’s identification. To know the rest, you need to visit your company website.

Q3. Is mobile money laundering?

Mobile money does not support any illegal activities. But there have been instances of money laundering by many nefarious groups. However, the government is looking down. 


Companies like M-pesa have succeeded in capturing the market to provide a convenient fund transfer method. They understood they were a market gap and took advantage of it. To date, 100 mobile money companies and digital banks that captured the African market. 84 companies have started in the last three years. 

Due to Africa’s depredated economic conditions, only a few have reached sustainable scalability. Some scalable sustainability companies include M-pesa in Kenya, MTN Uganda, Vodacom Tanzania, FNB in South Africa, GCASH, and Smart Money in the Philipines. But even these companies haven’t much traction and publicity outside of the rudimentary transfer and receiving funds facilities. But the companies are expanding and achieving financial exclusion.

Author Profile

Jonas Taylor
Jonas Taylor
Jonas Taylor is a financial expert and experienced writer with a focus on finance news, accounting software, and related topics. He has a talent for explaining complex financial concepts in an accessible way and has published high-quality content in various publications. He is dedicated to delivering valuable information to readers, staying up-to-date with financial news and trends, and sharing his expertise with others.

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