Mobile Financial Services term that refers to a range of financial services that can be offered across the mobile phone. Three of the leading forms of MFS are mobile money transfer, mobile payments, and mobile banking.

Mobile Money Transfer (MMT). Services whereby customers use their mobile device to send and receive monetary value – or more simply put, to transfer money electronically from one person to another using a mobile phone. Both domestic transfers as well as international, or cross-border, remittances are money transfer services.

Mobile Payments. While MMT addresses person-to-person money transfers, mobile payments refer to person-to-business payments that are made with a mobile phone.

Mobile proximity payments involve a mobile phone being used to make payments at a point-of-sale (POS) terminal.

Mobile remote payments involve using the phone as a mechanism to purchase mobile-related services, such as ring tones, or as an alternate payment channel for goods sold online.

Mobile bill payments tend to require interconnection with the bank account of the receiving business, and hence are considered part of mobile banking.

Mobile Banking. The connection between a mobile phone and a personnel or business bank account. Mobile banking allows customers to use their mobile phone as another channel for their banking services, such as deposits, withdrawals, account transfer, bill payment, and balance inquiry. Most mobile banking applications are additive in that they provide a new delivery channel to existing bank customers. Transformative models integrate unbanked populations into the formal financial sector.


  • Ease of Use: Mobile money helps people pay for goods and services; transfer money from almost anywhere even if they are not near a bank office. For example, M-Pesa has made it an integral part of the economy and providing mobile experiences that meet consumer expectations
  • The Unbanked: Embracing mobile money services will go a long way to addressing the needs of the unbanked, under banked, and the unhappily banked. Thereby, enabling them to make payments, transfer money to

merchants, friends or relative using mobile devices. Reducing the need for long queue’s in banks and bringing them into the fold of modern economy.

  • Accessibility: Mobile money transfers are filling this need and proving better at reaching poor rural resident than banks or standard money transfer services. It has changed commerce and eased trade by breaking the rigid rules of high finance and banking transactions.
  • Convenient Savings: Among the benefits of mobile money services is the ability to use the mobile phone to save and be able to cash-out the money whenever needed. This also reduces the need for physical cash, therefore, creating a firewall for theft.
  • Remittances: Considering huge number of the unbanked who send domestic/international remittances in cash and widespread use of mobile phones, both in developed and emerging markets; mobile money has the potential to keep pace with consumer’s needs and expectations to transfer money at any time of the day/week no matter how little the fund.
  • The Mobile Generation: The adoption of mobile technology is changing virtually all aspects of consumer behavior. This presents an unprecedented opportunity for mobile money service renders to activate relationships with both new and existing customers across multiple mobile channels.
  • Boosts Economic Growth: The handiness of mobile devices and with mobile network operation services scattered anywhere than traditional banks, availability of mobile money services in different strategic locations is crucial for long-term adoption and widespread use of such services, boosting economic growth and social development on both the micro and macro level



  • Mobile network connectivity is the biggest impediment. Network problems and reliable and fast internet connectivity is not available in some parts of the country
  • More than connectivity, security issues are at the forefront nowadays. People are always under the fear of misuse of their money by hackers and frauds. They always feel safer to have cash. Again there are also issues of identity theft that need to be addressed. Issue of pick-pocketing will be replaced by these concerns.
  • Enough support infrastructure is not available. In countries like Kenya there is not enough financial inclusion and financial literacy. Unless that builds up, there is no use in bringing in more and more advanced technologies.
  • It also does not cater to needs of the entire population especially those who don’t have mobile phones.
  • Kenya does not have a solid dispute resolution processes. Experiences of people with the customer service agents too are not encouraging.
  • Replacing day-to-day transactions with money is easier said than done. For e.g. in a crowded bus, buying a ticket by paying a conductor through mobile wallet does not seem a viable option. It might be possible but it’s a challenging task.

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