The Impact and Challenges of Mobile Money Transfer Services in Ghanaian Telecom Industries

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1 Journal of IMS Group Vol. 10, No. 2, July-Dec 2013, pp The Impact and Challenges of Mobile Money Transfer Services in Ghanaian Telecom Industries Gajendra Singh, Jarikre Amos Oghengweke & Kankam Boa Abstract The use of Mobile devices has gone past for making calls and receiving SMS. Individual can now transfer money, pay bills and undergo any e-transaction using their mobile devices with the help of telecom Network Service providers. This paper identifies the impact and some challenges that are currently facing mobile money service transaction in Ghanaian Telecom Industries by subscribers. Looking at the use of mobile money services transaction in Ghana, all telecom networks are currently running a service where customers can only send and receive transaction on their platform. This study tends to develop a platform where these network providers can extend their services to other network users. Findings suggest that the use of a single platform for mobile money service transaction will bring greater collaboration between telecom service providers and easy transaction between users. The findings imply that all telecom network should be on a single platform where customers can send and receive money using their mobile money transact services from one network to another. Keywords: E-commerce, Mobile Money, Telecom Industries. INTRODUCTION Gajendra Singh Director - Academics SMU Ghana (West Africa) gajendra.singh@smughana.com Jarikre Amos Oghengweke Lecturer - Dept. of IT SMU Ghana (West Africa) jarky4u2c@yahoo.com Kankam Boa Lecturer - Dept. of IT SMU Ghana (West Africa) essboa@hotmail.com 10 Background and Foundation - The Paradigm The use of various digital and mobile devices in carrying out the payments and all form of e- transactions has shown an advancement of electronic commerce (e-commerce). These mobile devices being powered by different telecom network provider enables subscribers to transfer money, make payment and even recharge their mobile service airtime. Various telecom network providers designed their mobile money services to carter for the demand of the market. This service enables individuals to involve in e-transaction with the help of their mobile phone making transaction and payment easier, secure and more convenient. Mobile phone is one of the devices that users employ to gain access to e-commerce which is transaction between individuals over the internet. Mobile Journal of IMS Group Volume 10 No. 2 July - December 2013

2 phones have deeply transformed the telecommunication industry and they have been proclaimed to be the new service frontier. E-commerce now changes the perception of how people carry out their business. Hence, Electronic commerce is now thought to hold the promise of a new commercial revolution by offering an inexpensive and direct way to exchange information and sell or buy products or services [8]. With the aid of a network service provider, individual within a particular network can transfer, make payment of services renders to another customer using same network. That is both users of the network service can transact within themselves, hence giving rise to what is referred to as mobile payment (M-Payment). M- payments are financial transactions undertaken using mobile devices such as mobile phones and PDAs. Various network service providers are into mobile money service as a result of customer satisfaction. Looking at the mobile money service in Ghana, individual outside a network service cannot transfer money or make payment to another individual within a network. Hence, this study tend to develop a single platform where all network users in Ghana can transfer money, make payment or buy airtime from their own service to another using their mobile devices. Mobile has played a giant role in communication technology through its versatility and superiority. According to a post on myjoyonline.com, Ghana has an estimated 93 percent mobile penetration, yet approximately 90 percent of business transactions remain cash-based. It is found that access to mobile phones combined with the ability to deliver financial services via telephone makes it possible for millions of unbanked consumers in Ghana to participate in financial systems. Additionally, it represents a new market for bankers who once saw the market as unprofitable [6]. Consumers are using mobile money where there is a very clear, simple value proposition. Sofar, the predominant value proposition is being able to send money easily, cheaply, and securely. According to CGAP s Gautam Ivatury, this is making people s lives easier and we should count it as a huge success[7].many mobile money providers are happy to focus on these relatively well-proven killer apps, for now. It is important not to confuse the market with too many services, and to take the necessary time. Mobile Money is a cash management service available on the mobile phone or internet. It is mainly about facilitating money transfer for the Ghanaian market. The service can also be used for reloading of MTN airtime units and for payment, of utility bills, goods & services. The service is available to both mobile and nonmobile users [5]. MTN Mobile Money is provided by MTN in partnership with banks. Mobile Money will also operate through authorized Merchants who will facilitate the service on behalf of the partner banks. MTN Mobile Money comprises of individual (subscriber) and merchant wallets. Wallets (individual & merchant) are created after the registration process is completed on the phone with the selection of a four digit Mobile Money PIN. The Mobile Money PIN is required to authorize all Mobile Money transactions. No single transaction can be completed without the mobile Money PIN. Wallet transactions for MTN Mobile Money are in Ghana cedi [5]. In many developing worlds these mobile payments services are the first financial service for the previously unbanked people. More than a billion people worldwide lack access to traditional financial services yet many of them have mobile phones and access to wireless telecommunication networks. They offer a compromise between formal bank accounts and temporary money transfers. Experts predict that by million people will rely on mobile money [9]. Journal of IMS Group Volume 10 No. 2 July - December

3 Transforming new technology through Mobile Money The basic idea of mobile money was as a result to support cashless economy which is reduction of money in circulation. The ubiquity and convenience of the mobile phone is bringing new value, opportunities that no one foresaw before in the delivery of financial services. For businesses, the opportunities include reaching vast numbers of new customers and providing better service to existing customers. In particular industries, such as telecommunications, software, and even retail, it offers the chance to develop whole new business lines. For customers, the advantages of mobile money include affordability, security, and convenience. THE GROWING MOBILE PAYMENTS MARKET Mobile payment transactions already total $240 billion annually, but that's just the tip of the iceberg. Juniper Research reports that the market will grow 2x to 3x in the next 5 years. By 2013: By 2014: By 2015: Sales of NFC equipped phones will exceed $75 billion. 1 in 5 cell phones worldwide will use NFC technology. NFC transactions alone will approach $50 billion. Google predicts that 50% of cell phones will use NFC technology. The value of all mobile money transactions is expected to reach $670 billion. Digital goods will make up nearly 40% of this market. Asia, Western Europe and North America will be responsible for 75% of all mobile payment transactions. Figure 1: The Growing Mobile Payment Market Survey [6] The mobile channel may open access to financial services and other markets to many, mostly lowincome, customers who are currently excluded altogether. As per Figure 1 survey based on one internet site by 2015 the value of all mobile money transactions is expected to reach $670 billion in Asia, Western Europe and North America and in Africa stood for 63 percent of the total value. OBJECTIVES OF THE STUDY Goals of Research: The Present Study is based on the following objectives: Our primary goal was to conduct a survey on the mobile money transfer to find out the impact of mobile market transfer services in Ghanaian customers using different telecom networks. To identify and understand the awareness and challenges while using the mobile money transfer services in Ghana. Our third goal was to help customers to better understand why these practices are more likely to be more effective than others. For this purpose, we used a wide range of data sources (including the professional work groups). A fourth goal was to make suggestions in the light of the findings of our study. 12 Journal of IMS Group Volume 10 No. 2 July - December 2013

4 METHODOLOGY Sample &Sampling Technique The Study is mainly based on the primary data. The present study was conducted in various places in Accra, Ghana (West Africa). For the selection of the sample the researchers adopted purposive random sampling technique. The primary data were collected from 500 customers using different telecom networks. Tool Used To collect the data the researchers developed a questionnaire and had one to one interview to find out the awareness, limitations and impact of mobile money transfer service. RESULT ANALYSIS AND DISCUSSION The data were analyzed with the help of simple statistical technique, percentages. This research paper has emphasized on finding out elearning as a tool of teaching, availability of various media and their use in teacher education and various strategies of teaching employed for effective communication in education. Modes of communication have never been the same and so have been the ways of using lots of innovation techniques to provide better facilities to the telecom customers. No. of Subcribers No. of year using Mobile Phones Figure 2: Response to the use of Mobile Phones Figure 2 shows that out of 500 users less than 10% of the subscribers in Ghana were using the Mobiles for last 11 years and maximum number of subscribers are using the mobiles phones for last 5-6 years. This result shows the awareness of Mobile Phones in Ghana. Especially in rural areas the awareness of mobiles is not much. Journal of IMS Group Volume 10 No. 2 July - December

5 Table 1: Network Providers and Subscribers in Ghana Network Provider No of subscribers MTN 226 Tigo 84 Airtel 120 Vodafone 15 Glo 55 Total 500 Network Providers 250 No. of Subcribers Figure 3: Network Providers and their subscriber s ratio The perusal of Figure 3 clearly depicts that out of 500 subscribers 226 were using the MTN and second highest subscribers were from Airtel. Though Vodafone is also one of the known brands but still there were not many users of this network. Vodafone has recently announced to introduce the Mobile Money Transfer service in Ghana also. 10% 30% 60% Figure 4: Level of usage of mobile money services for cash transfer or payment of fees/bills 14 Journal of IMS Group Volume 10 No. 2 July - December 2013

6 As Figure4 shows as result of 60 % of the subscribers are still facing the connection problem while using service for cash transfers/payment of bills while 30% were satisfy with connectivity and service. Out of 410 subscribers 10% are not using the service. Subscribers Interest 23% 10% 39% LOW MODERATE HIGH Figure 5: Mobile money service usage among subscribers of various networks Figure 5 above shows that 39% of the subscribers indicate low interest in their usage of mobile money service in payment of bill/fees. This shows that these subscribers are able to perform basic functions of services offered, but still require help on a regular basis. While 23% indicate moderate interest hence, are competent in a number of services offered and 10% indicate high interest in their usage of the service that shows proficiency in using a wide variety of services offered. No. of Hours spent on Mobile Phone No. of Subcribers Figure 6: hour(s) spend by subscribers in a day using their mobile phone Journal of IMS Group Volume 10 No. 2 July - December

7 Table 2: Subscribers response to use of mobile money services in different areas Use of mobile money services in Different Areas No. of Respondents N = 500 Item No. AA % F % S % R % N % Personal transfer of money Bills payment Buying of airtime Check account balance Almost Always (AA = 5), frequently (F = 4), Sometimes (S = 3), rarely (R = 2), Never (N = 1) Table 2 shows that 11% of subscribers indicate that they almost always use mobile money service for personal transfer of money, 13% almost always for bills payment, while 11 % almost always use the service for buying airtime and 18% check their account balance using mobile money service almost always. Table 3: Subscribers response Different Methods of using Mobile money services Methods Using a mobile money service with my service provider makes it easier to personally transfer money, pay bills, buy airtime and check account balance. Use of mobile money service requires unnecessary training The integration of a single platform whereby I can use my mobile money services with a subscriber on another network service will improve the services usage over the previous platform of same network usage I will probably never have a need to use mobile money services on my network I believe that all subscribers should know how to use mobile money services It is important that my network provider plan includes the use of mobile money services I believe mobile money service integration into a network, motivates subscribers Unstable network service, affect the usage of mobile money services Number of Respondents N=500 No. SA A N D SD Almost Always (AA = 5), frequently (F = 4), Sometimes (S = 3), rarely (R = 2), Never (N = 1) 16 Journal of IMS Group Volume 10 No. 2 July - December 2013

8 Table 3 shows how subscribers response to different strategies to be employed by network service provider to ensure effective usage of mobile money service. FINDINGS This research was focused on subscriber s challenges and impact of mobile money service use in Ghana. Majority of the subscribers (82%) are fully aware of mobile money services through advertisement and references. Out of 410 respondents who were aware of mobile money services were either referred from 29% friends, 60% Advertisement or through 11 % SMS sent by these network Provider. Many active mobile money users believe theyneed help to fully understand the service. Many said they are unable to carry out transactions independently, and they do not like having to rely on others, particularly agents, for help. A higher percentage of the subscribers tend to use the mobile money service (Figure 5). It can be seen that 230 subscribers strongly agree with the view of integrating a single platform where subscribers of money services in a network can exchange services with another subscriber in another network (Table 3). 87% of customers are using prepaid services while only 13% are using postpaid services. 82% of respondents were aware of mobile money services while 18% of them have never heard of this service. The mystery shopping exercises discovered that mobile money agents often do not explain about the service or its benefits even when non-users ask for information. They can be helpful resource for awareness of mobile money services provided by different networks providers. You cannot use an existing prepaid airtime card to load your mobile money wallet. 60% of the subscribers are still facing the connection problem while using service in Ghana and 30% were satisfied with connectivity and service. Out of 410 subscribers 10% are not using the service. Few of the responders were willing to change their network service providers because of lack of this mobile money service availability in their network. After one to one interview with some of the responders we found that Glo is not providing this service and Vodafone has started this service in Ghana but most of the subscribers were not aware of this service. SUGGESTIONS More non-users reported not using mobile money because they don t knowhow to use it especially in Rural Areas. Network providers should come up with new enlightenment programs on any of the media. The network providers need enough attention on messages to their subscribers to make them aware of the mobile money service. The telecom regulatory body in Ghana (National Communications Authority) should provide a single platform to exchange the mobile money services for all subscribers using different network. This will bring easy transaction and more connectivity between all users to avail the facilities with each other. Based on the feedback that 60% of subscribers are facing the connectivity problem in Ghana The prepaid airtime card should be allowed to use it as mobile money wallet amount for subscribers to make the system more convenient. Journal of IMS Group Volume 10 No. 2 July - December

9 Network providers should provide the facility of installing the applications of mobile money on registered prepaid SIM cards instead of providing a new special SIM card with already installed application. While buying the new Special SIM card subscribers need to register them again which has been provided to same network provider earlier. CONCLUSION AND FUTURE RESEARCH Use of Mobile money service has come so far in Ghana and majority of the sample subscribers are aware of the service but because of some limitations most of them have not use this service. Authors are in the opinion that if the information about the service is given by the network operators to each subscriber then this service can be helpful for time saving; avoid traffic to finish payment; save transport and easy to use. In this research the focus of authors was more on subscriber s challenges and impact of mobile money service but there is vide scope of research in this area by involving the service providers which can bring new innovations. REFERENCES [1] PotiOwiliAbaja, Dr. Jesse W. Mwangi, Prof. Dr. Jason Githeko, RoselyneAkinyiOluoch (2013). FACTORS AFFECTING ADOPTION OF MOBILE BANKING TECHNOLOGY IN KENYA: A Case of Bank [2] Customers within Nakuru Municipality, Asian Journal of Business and Management Sciences, Vol. 2 No. 11 [01-13]. [2] HarunaIssahaku (2012). Challenges of Electronic Payment Systems in Ghana: The Case of e-zwich (2012), American Journal of Business and Management, Vol. 1, No. 3, 2012, [3] AsgharAfsharJahanshahi, Khalil MdNor, Ali Akbar Hozhabri, Seyed Mohammad SadeqKhaksar (2011). [4] From Mobile to Mobile Commerce: An Overview In The Indian Perspective, 2nd International Conference On Business And Economic Research (2nd Icber 2011) Proceeding, Langkawi Kedah, Malaysia. [5] [6] Survey on mobile money transfers (2012) in-2012/ [7] Ivatury, Gautam and Ignacio Mas The Early Experience with Branchless Banking. CGAP Focus Note No. 46. Washington, DC: CGAP. Page 2. [8] Flatraaker, D., Mobile, Internet and electronic payments: the key to unlocking the full potential of the internal payments market, Journal of Payments Strategy & Systems, 3(1). [9] Merritt, C., Mobile Money Transfer Services: The Next Phase in the Evolution in Person-to-Person Payments. Structure. 18 Journal of IMS Group Volume 10 No. 2 July - December 2013