What’s next for mobile money? Point Of Sale Checkout will add much needed diversification

MMoneyPos

For all the years I have owned a Mobile Money(MM) account, I have never used it for anything other than money transfer. Recently, more use cases are being added like utility bill payment but to a large number of people MM is just a money transfer service.

How can MM have a bigger footprint in our lives?

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Point of Sale Checkout with Mobile Money

I would love to pay for my groceries using my mobile money at the local supermarket or, it would be great if someone got me out of an emergency situation by paying for my expenses directly from their account wherever they are without having to send money to my account first.

A point of sale is the point at which a customer makes a payment to a merchant in exchange for goods or services. Some points of sale are computerized with POS software while most use traditional methods, books or nothing at all.

Currently there are some merchants in the country who accept mobile money as a form of payment but the entire payment process is very slow which renders it almost impractical especially for busy checkout points. The current practice involves a customer at the checkout sending money from their account to the merchant’s account using the usual slow money transfer procedure.

How it could be done

Forget NFC or Bluetooth proximity payments; for various reasons I don’t think they are what we need (story for another day).
An ideal solution would be one that is;

  • Cheap or free for the merchant,
  • Secure enough to be allowed by the customer,pos
  • Easy to use by all parties
  • Have fast response times
  • Be flexible in its integration with existing service provider’s setups.

We need a solution around mobile money to facilitate POS checkout with at least the above features for a successful rollout. The solution can be software that is installed on an already existing POS devise or it can be an independent devise with inbuilt software to make this possible.

The Telecos are well positioned to come up with such a solution but I don’t see them doing so. Instead I believe an independent company or a Startup majoring in payments and transactions processing will develop one.

MM POS checkout will not only add value to mobile money but will usher in a cashless society if it gets mass adoption. Some governments foresee this and have laid foundations to achieve it. Recently the Central Bank of Nigeria came up with a cashless economic policy designed to provide mobile payment services to the entire population while breaking down traditional barriers hindering financial inclusion of millions of Nigerians.

MM POS benefits include;

Merchants: zero cash thefts at stores.
MM Service providers: Added revenue source on transactions, Customer loyalty
Customer: No more need to walk with large cash reserves for shopping, reduced dependency on MM agents
Economy: Reduced cash in circulation

But there’are challenges that lie ahead

Standardization
In the absence of a Mobile Money regulatory authority all MM service providers have a go-it-alone approach which is bad for  the consumers because they end up having different weak solutions developed as a result of me-tooism strategies. If a POS solution is to be developed by one service provider, in just a few months the rest will have a similar solution built just to serve their own customers!

To merchants, the best solution would have to be one where all MM service providers are catered for, one solution for all.

Consumer adoption takes time
MM POS checkout depends heavily on merchants and customers to be successful. Unfortunately the customer is the merchant’s boss and he is usually not in a rush to adopt new technologies especially if it concerns his money. Juicy incentives or some sort of legislation usually speeds up this time.

There are some other challenges not outlined above but the focus should be less on the challenges and more on how best to implement this service.

This is article is part of the what’s next for Mobile money series, you can find other articles from here, ATM Cash-outIntegration with International payment networks

  • How about Merchant originated payment requests – current mobile money systems are setup so that the payee sends money to another number, which leads to errors if the entered number is incorrect (which is a major customer headache). Having merchant originated payment requests, almost like the withdrawal requests from agents, can reduce the errors in the transfer since the customer only has to approve the transaction.

    These would work with dumb and feature phones, with the ability to add Android/IOS/NFC related features for smartphones

    More at http://ssmusoke.wordpress.com/2012/09/21/mobile-money-the-next-frontier-ubiquity/

    • Stephen, I agree with that. However, how would it work with dump phones? Meanwhile check out http://www.kopokopo.com, they seem to be doing what Denis is talking about!

      • David, The same way when you go to withdraw from an agent (MTN Mobile Money), they make a request that you can approve by entering your PIN. I think this is a very basic single step application which does not require complex engineering.

        The charges can also be different from an agent withdrawal hence encouraging its usage since its not a cash out but an e-value transfer

  • Ibrahim Ismail K

    I have built one on windows . . . . . and its as easy as 1,2,3