Blog post

Mobile Technology in the Money Transfer Industry 

Author:    Preethy Kurian, Crosspay   |   May 19, 2023

Mobile Technology in the Money Transfer Industry 

Money transfer should always respond to your immediate needs and it is changing thanks to digital wallets. But what exactly are digital wallets, and how do they work? In a nutshell, you create a profile on the app where you receive or send money, which is linked to your bank account. This profile has a unique code to identify you and your transactions. What’s next? When you exchange cash with someone, they scan the code of your wallet and transfer money into it using another app called an electronic wallet. And that’s it! 

 Traditional Financial Services 

In the past, senders would visit a bank or exchange agent and wait in line to transfer money overseas. This was often time-consuming, inefficient, and costly for both senders and recipients. More than lines, there was also the issue of multiple forms of identification and a tiresome process that took days before the money was in the recipient’s hands. 

 Mobile Remittance Apps Provide a Solution 

Various companies in the industry have introduced mobile remittance apps in recent years. These apps allow users to send money quickly and securely from their phones. They also allow you to track your transaction and even set up recurring payments online, so you never have to visit an exchange office again! 

 How Digital Wallets Work and Their Benefits  

A digital wallet is a software-based tool that stores customers’ payment information and allows them to make quick and secure online purchases. Most modern e-wallets link customers’ payment methods, such as their credit card information, to the vendor who hosts the transaction. Mobile technology has made it possible for people to transfer money faster and more securely than ever before. 

 Digital wallets are one of the most innovative technologies that have changed how we pay for goods and services. They have allowed businesses to accept customer payments without cash, opening a bank account, or signing up for credit cards. While Digital Wallets services haven’t completely replaced the credit card, they have become strong competitors. No more typing in your credit card info or rummaging through multiple purses/wallets to find the right one when making an online purchase. Your payment info is safely stored and accessible from any device with internet access. The card number is never stored in the app and is assigned a unique virtual number. This ensures that your money will always be protected, even if you lose or misplace your phone. 

 The idea behind digital wallets is to make it easy for users to make online payments with just a few clicks. Some of their main benefits include heightened security and the convenience factor. 

 Fraud reduction: E-wallets store your bank and payment information but don’t share it with merchants’ systems. They act as data hubs, generating unique codes or payment codes that external systems can use without accessing vulnerable banking data.  

 Mobile use: A great advantage is that customers can access them from their mobile phones or any other device that supports a specific wallet’s system. Shoppers can add items to their online shopping carts and check out in a few clicks. Not logging into their bank account or entering shipping information saves time for both the buyer and seller since neither party has to take extra steps once a purchase is made. 

However, before trying out a new digital wallet service, research to ensure it’s legitimate. 

The advent of Digital Wallets has had a revolutionary impact on the money transfer industry, which now allows people to send funds directly from one country’s currency into another.  

 The Role of Digital Wallets in Enabling Cross-border Remittances 

The growing adoption of digital wallets has led to the emergence of a new category of services that enable cross-border remittances. These services use the digital wallet as a platform for sending money from one country to another, with the funds being delivered to recipients via mobile money accounts. The benefits to both customers by making transfers cheaper, quicker and more convenient, and mobile money providers by creating a new source of funds for mobile wallets.  

 Will we see this new trend take off successfully and be readily adopted by new and existing mobile money users? 

The answer is that it depends on a few factors: the need for a critical mass of active mobile money users in receiving countries; a more competitive pricing model that mirrors domestic P2P transfer fees; customer acceptance on the sending side; and finally, an enabling international money remittance regulatory framework that allows for cross-border transfers between digital wallets. 

 Mobile Wallets and Money Transfers 

The mobile money market has proliferated in recent years, driven by increasing smartphone penetration, better data plans and regulatory changes in places like Sub-Saharan Africa, where mobile money adoption has risen rapidly. It took the industry 17 years to reach 800 million customers but only 5 years to reach the next 800 million. 400 million accounts were added over just a few months during the pandemic—the equivalent of adding almost 150 new accounts every second! Today there are more than 1.6 billion registered mobile money accounts. 

Studies show that Africa accounts for 70% of the world’s $1 trillion mobile money value. The value of Africa’s mobile money transactions increased 39% to $701.4 billion in 2021 from $495 billion in 2020, highlighting the future direction that banking is heading on the continent: towards a more advanced cashless and mobile platform. 

Today, in many places, mobile wallets are commonly seen as virtual bank accounts that enable customers to pay bills and transact—just like any physical bank account. This works exceptionally well in Africa, where the physical network of banks can be limited. Mobile money is not just a trend; it’s a way of life and the future of banking in Africa. Mobile money is disrupting the traditional banking industry by offering financial services to people who have never had access to them. It has also helped millions of Africans save money and increase their financial security and resilience. 

Crosspay and Mobile Payments 

Crosspay has been in long term partnership with mobile payments platforms like TerraPay and Hello Paisa, to enable real-time international money transfers to mobile wallets in Africa. We send to many countries including Kenya, Ghana, Cameroon, Rwanda, Ivory Coast, Senegal, Uganda, Botswana, Malawi, Mozambique, Tanzania and Zimbabwe. 

Through its partnerships, Crosspay makes it faster and easier for consumers to send money to other people’s mobile accounts.  

We are continually investing in the mobile services space. We have been working to expand our footprint into new markets and offer our customers the best value, convenient, and cost-effective way of sending money. Our goal is to make sending money as simple as possible so that our customers can choose the service that best meets their needs. 

 

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