By Timothy Sibasi, firstname.lastname@example.org
KAMPALA – The Story of Mobile Money services goes as far back as the year 2000. At the inception and popularizing of the mobile phones, many service providers researched for ways of attracting customers to their networks.
This was done by adding more services to the already congested mobile lines. People started by sending Airtime to friends and relatives. Some recipients could turn the sent airtime into cash at a fee.
In 2002, the common wealth Telecommunication Organization, funded by the Department for International Development UK, discovered that Kenya, Uganda, Botwana and Ghana, people were using airtime as proxy for money transfer.
In 2004, in Mozambique MCel the telephone company introduced the first authorized airtime exchange. On record globally, in 2005, two companies in the Philippines that is Globe Telecom and Smart Communication, started what today we have as Mobile Money but on a very small scale to selected and trusted clients.
The big start of the Mobile Money service though, seriously started around 2007 in Kenya. This was the SMS transfer of money which became to be known as M-Pesa. It is a brain child of Safaricom the biggest mobile phone provider in Kenya, it was developed by Vodafone who own 35% shares in Safaricom.
In 2007, a student from Moi University in Kenya came up with Mobile Money software that could allow people to send, receive, and withdraw money from their mobile services. Safaricom convinced the student and bought the rights of ownership of the project thus becoming the sole owners of the patent rights.
In 2007 following a student software development project, Safaricom started a new mobile phone based payment and money service transfer known as M-Pesa.
Mobile Money basically is the transfer of money using a mobile phone. It is a very fast and efficient means of payment. It is used to deposit, withdraw, transfer money, pay goods and services, settle debts etc. According to the Financial Access report, it is assumed that by 2013, about US$600 billion had been transacted through mobile money network worldwide.
The use of Mobile Money especially to the developing world both private and public has encouraged funding from international organizations like the Bill Gates foundation, USAID etc.
Mobile money in Uganda:
In Uganda, mobile money service was introduced around 2008 by MTN Uganda and later joined by Zain which later evolved to Airtel. When it started, people did not understand it, there was a slow response unlike Kenya and Tanzania where it was a hit.
People later embraced the mobile money system and by 2015, an estimated 5,000,000 were using the mobile service either indirectly or directly.
Mobile money has become the fastest and safest way of sending money to different destinations in the country. Many people can now send and receive money using Mobile Money. The Mobile money has now achieved what banks had failed to achieve, by transferring money to different destinations, fast, and efficiently.
Many people abroad prefer to remit money to their relatives using Mobile money system than other services. At the moment in Uganda, mobile money is used to pay for school fees, settle water and electricity bills, Television services, church dues and so on. It has eased people’s lives as someone can transact from anywhere at any time and get services.
Why Forex Bureaus operators joined Mobile money advent?
Forex Bureaus could not afford to be left out on this lucrative business of money transfers. Around 2013, the Forex Bureau Association of Uganda approached Bank of Uganda the statutory regulator of Forex Business in the country to seek permission and allow the Association members to start transferring money by Mobile means.
This the Central Bank could not permit. They advised that the statutory instruments is the 2004 Foreign exchange Act and that of 2006, did not permit such transactions. Many issues were raised including security, risks involved, money laundering and so on.
From that time the need to pressurize the association was urgent as this was the only way to go especially those involved in the money remittance. The lobbying went on, and finally in October 2016, Bank of Uganda allowed Forex Bureaus to start engaging in the Mobile Money business.
As much as Forex Bureaus demanded to be allowed to use the Mobile Money business, according to the records, the returns have not been as anticipated. Few have actually applied to start the transactions.
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