Now the brick and mortar concept of bank branch has been replaced by click. Now the use of mobile banking and in particular, payments by mean of smartphones has tremendously increased across the country.
In today’s world, smartphones are one of the most important media for communication and also a medium or channel for financial inclusion as they are easily penetrated in the population and are feasible of interconnecting data economically and safely.
It can be said that when smartphones are linked to the banking system, it helps in developing new business models and provide financial services or banking services to the people who traditionally would have been excluded from the formal financial system.
It is believed that there are hundreds and thousands people in Pakistan use mobile banking services or financial services and their population is growing at a rapid pace. Though the pace of penetration of the implementation of mobile financial services is slow, it is likely to increase with the entry of solution providers.
Financial Institutions, governments and donors around the world strongly believe that mobile banking services can play an important role in alleviating poverty. Though financial inclusion was never a part of MDGs (Millennium Development Goals) which was set in the year 2000 but even though financial inclusion has moved up the plan of emerging and developing countries through AFI (Alliance for Financial Inclusion) and also including itself at the G20 summit which was held in the year 2011.
It is evident that poor people have now recognized and need a variety of financial services apart from credit facilities provided to them. This has given birth to a new concept “Mobile Money”. It is important to comprehend the terms related to it and that may have bearing on the meaning of Mobile Money.
The terms m-banking, e-banking can be defined as “financial services delivered through mobile networks and performed on smartphones. These administrations might be or may not be characterized as banking administrations by the controllers, contingent upon the enactment of that nation being referred to, just as on which administrations are advertised.”
The expression “Mobile Money” or “m-cash or m-money” is a kind of electronic cash that implies money related administrations given to buyers using cellular phones.
Mobile Money or m-money helps any smartphone users or subscriber, whether they have an account or not in a bank to deposit money in their mobile account, send and receive money through a mobile device and allow the receiver to turn that money back to cash easily.
Mobile Banking is another method of making an open door past the bank office and ATM organizes for those individuals who are living in remote zones with the goal that they could without much of a stretch and rapidly access formal monetary administrations. Mobile Banking is only a simple approach to bring out financial exchanges using mobile gadgets like mobile handset, smart telephones or individual advanced assistant.
Mobile banking compared to conventional banking empowers its record holder to direct their exchange without visiting any bank office, and consequently, it makes an individual more productive and save their time just to exterminate different problems.
Telecom operators in Pakistan are offering mobile money transaction services and it may also soon make it possible for banks to provide phone-based credit system. It may be said that use of mobile phone technology is a win-win situation for bank as well as their customers.
At present the ways of doing things are changing dramatically. Increasing digitization and the new business models have made possible transformation of industries and will continue to do so.
These trends have opened up doors for incumbents and players from different industries to collaborate and co-create new value and growth opportunities. In terms of payment services, convergence is drawing together different sectors in which payments are used, including banking, transportation, ticketing and commerce. Examples of industry convergence accelerated by payment services:
Telecoms and banking
Telecoms companies are making the most of their large customer bases and their mobile device market penetration to provide mobile banking services for non- and under-banked customers.
Social media and retail
Social media platforms are increasingly moving from an advertising-centric to a commerce-based business model, with fully integrated payments functions (also used for social payments) — and they are using transaction data to create personalized offers.
E-commerce and consumer finance
To increase appeal especially among younger generations, buy now, pay later options — offering the opportunity to pay in installments — are available to customers, and can be selected with one click during the online shopping checkout process.
Transport and travel
A variety of options, such as single payment for multi-modal journeys (a journey by train and bus), pay as you go transportation and electronic tolling are providing convenience and removing frictions within the transportation and travel sector.
Travel and insurance
Situation, location based and on-demand insurance become possible with an instant payment solution.