“Excuse me Bana Mulenga, is it ok if I pay for the tomatoes with an e-wallet or mobile money?” To which Bana Mulenga responds without hesitation that ‘MoMo’ is her preferred option to achieve financial close.
There has been a salient battle that has ensued since the advent of ‘digital’ money. While brick and mortar Banks in Zambia have invested colossal amounts of cash kwacha in installing Automated Teller Machines (ATMs) at various secure locations to ensure ‘easy’ access to cash, all the mobile telecommunication companies in Zambia (except for the Angolans who have a license with no signal) have integrated Mobile Money (MoMo) into their product offering.
Banks were the first to bring cash closer to the consumer and the e-wallet introduce them to a mobile way to send and receive cash without the use of a plastic card. But when one conducts a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) one quickly notices that weakness in this offering is that there are limitations in terms of where consumers are able to redeem their cash. Furthermore, the capital outlay for ensuring that consumers have access to their cash is also high as running costs and availability issues related to technology especially in the era of load shedding further distances them from their cash. Worst still, transferability is seldom an option. If the e-wallet cant be redeemed, one simply walks away without transacting leaving commerce starved of the money supply.
However, ‘MoMo’ unintentionally addressed the aforementioned e-wallet challenges by simply taking advantage of available opportunities in cash transfer space. By being disruptive in its approach, while ATMs were busy taking away Bank Tellers jobs, ‘MoMo’ was springing up SMEs and creating jobs in the hundreds (not bad when you have a large pool of unemployed youths eager to work). In addition, it brought dynamic mobility and transferability. To some extent one would argue it has slowly become the closet thing to physical cash because all one has to do is remember their phone number (accidentally losing an e-wallet pin is analogous to misplacing a K50 note in the house. You know you will find it, but it will take you time).
But the MoMo is not immune to flaws. End to end transactions with mainstream retailers remains work in progress as software developers fall all over themselves in an attempt to deliver a seamless solution through integrated payment solutions that incorporate the MoMo. Regulation on limitations of how much MoMo can actually be loaded with also remains a benign deterrent to which the Central Bank may want to reconsider in an era where inflation now lurks in the double digits and higher Kwacha amounts become ubiquitous.
It is no wonder that most of the big banks in Zambia have embraced integration with MoMo because they know all too well what it means if they are left behind. Bank account to MoMo account transactions have slowly become the norm. However, Banks need to do more to reign MoMo in as this adopted child has a mind of its own. It now commands a potential footprint of over 10 million Zambians (each mobile phone owner is in effect a MoMo account holder). Therefore, prudence would entail cash-rich banks plow money into research and development so that they can tap into the limitless potential of MoMo. The only thing that stands in their way is that this is not their core business. Or isn’t it?