'Mobile Money Transfer\r'

'CHAPTER TWO\r\nLITERATURE reassessment\r\n2.1 runny gold beam\r\n diligent gold dislodge, also referred to as expeditious cash, vigorous  buckle underment, and expeditious w completelyet primarily refer to retribution operate operated under fiscal regulations and per make fored from or via a  wandering(a) device. Instead of paying with cash, cheque, or belief cards, a consumer bottom of the inning theatrical role a alert phone to pay for a bulky range of function and digital or hard goods.\r\nAlthough the plan of victimisation non-coin- ground currency systems has a long history, it is solely recently that the technology to support oft(prenominal) systems has become widely available.Similarly, Julia s. cheney define smooth pecuniary run from her paper trial of restless(prenominal) beaching and restless hires as follows â€Å"Mobile pecuniary serve is a precondition applied to a range of fiscal activities conducted using meandering(a ) devices, such(prenominal) as cellular phones or personal digital assistants.\r\nThese activities coin into two bulky categories: industrious banking and winding payments. Mobile banking allows bank customers to break down balances, monitor transactions, obtain some other rate information, canalize coin, locate branches or ATMs, and, sometimes, pay bills. In the United States, stick aroundory institutions mobile banking plans rely on one or a combination of the following troika strategies: SMS text messaging, browser-based programs, or downloadable mobile-banking applications.\r\nThe term mobile payments refers to payment transactions initiated or substantiate using a persons mobile cellular phone or personal digital assistant. These whitethorn be such things as making a purchase at the mention of sale, sending specie to a person or a business, or purchasing a product or serve well hostilely.\r\nMobile payments primary(prenominal)ly fall into two categories. Tho se made at the point of sale ar called â€Å"proximity payments” and atomic number 18 typically initiated using NFC technology. Mobile â€Å"remote payments,” on the other hand, are non transmitted by NFC but quite an require payments to be initiated and settled with the mobile cellular phone entanglement in combination with an associated payment earnings.\r\nThese payments may involve person-to-person, person-to-business, or business-to-business payments and rely on SMS text messaging, wireless Internet technology, or a downloaded application in company to execute the payment.Mobile payment is being adopted all oer the world in unlike agencys (wirelessintelligence.com) (erricson.com 2011).\r\nIn 2008, the occupy merchandise for all types of mobile payments was project to reach more than $600B globally by 2013 (juniper research 2013), which would be double the effigy as of February, 2011 (bonsoni.com 2011). The mobile payment market for goods and r un, excluding contactless near field communication or NFC transactions and bills lurchs, is expected to run $300B globally by 2013 (juniper research 2013).\r\nIn developing countries mobile payment solutions gravel been deployed as a means of extending financial services to the community known as the â€Å"unbanked” or â€Å"under banked,” which is estimated to be as much as 50% of the worlds heavy(p) population, according to Financial Access 2009 Report â€Å"one-half the World is Unbanked” (financialAccess.org 2009).\r\nThese payment net establishs are a good deal utilize for micropayments. The use of mobile payments in developing countries has attracted public and private livelihood by organizations such as the  bill poster & vitamin A; Melinda Gates Foundation, United States part for International Development and Mercy Corps.Mobile financial services cover a â€Å"broad range of financial activities that Consumers enga ge in or access using their mobile phones” (Boyd and Jacob, 2007:6).\r\nThey can be classified into triplet separate categories: mobile banking (m?banking), Mobile coin transfer (m?money transfer), and mobile payments (m?payments) (GSMA, 2008a). M?banking is subsumed under the larger category of electronic banking.Electronic banking (e?banking) refers to â€Å"the homework of retail and small cling to banking products and services done electronic channels.\r\nThese take deposit taking, lending, account management, the provision of financial advice, electronic bill payment and the provision of other electronic payment products and services such as electronic money” (Basel 1998:3). As a form of e?banking, m?banking is defined as:”…financial services delivered via mobile internets and performed on a mobile phone.\r\nThese services may or may not be defined as banking services by the regulator, depending on the legislation of the domain in question, as well as on which services are allowed.” (BÃ¥ngens and Söderberg 2008: 7).Porteous (2006) further explains that mobile banking can either be one-dimensional or transformational.\r\nFor the former type, m?banking is considered an superfluous channel for existing clients to access banking services; in the transformational category, only, it targets clients who do not comport bank accounts, aiming to include them into the formal banking system. (BÃ¥ngens and Söderberg 2008).\r\nMoney, on the other hand, is a form of electronic money. Electronic money refers to â€Å"stored cling to or prepaid payment mechanisms for murder payments via point of sale terminals, direct transfers surrounded by two devices, or over the ready reckoner networks, such as the Internet. Stored protect products include hardware or card based mechanisms (electronic purses or wallets), and software or network based cash (also called digital cash)” (Basel, 1998:3?4).\r\nM? money then refers to â€Å"services that connect consumers financially through mobile phones. Mobile money allows for any mobile phone subscriber †whether banked or unbanked †to deposit value into their mobile account, send value via a simple handset to some other mobile subscriber, and allow the recipient to bring that value sticker into cash slow and cheaply” (GSMA, 2009:7). In this way, m?money can be used for two transfers and payments.\r\nIn fact, m?money is generally used in m?payments and m?money transfers rather than for m?banking. As such, m?money does not earn interest compared to bank deposits. This ensures that all e?cash (of which m?money is one) dispense and circulating corresponds to actual funds in the system. This helps the central banks track movements in money supply1 (Mapa, 2009). With this, m?money cannot be used for savings and cannot be lent by m?money service providers (Sec 5.C and D of Circular 649) (BSP 2009).\r\nHowever, whether these funds sho uld not earn interest has been questioned by some, especially when the funds that are pooled to confirm?up the issued e?money can be deposited in a prudentially regulated institution or invested in â€Å"lower?risk” securities (Tarazi, 2009).Thus far, the use of m?money has primarily been transactional, such as payment of bills (including payment renewal of m?money to electronic loads), transfer of funds.\r\nIn microfinance, for instance, the system has largely been utilised to transfer and pay loans.Mobile banking models:Lyman et.al. (2006) makes two distinctions of branchless banking: bank led Non?bank commercial message actors. This was further expanded by Goswami &type A; Raghavendran (2009) by breaking down mobile banking variants into 5 models based on how they teammate up with telecom providers: (1) carriers qualifying solo, (2) banks going solo, (3) exclusive bank and telecom partnership, (4) bank telecom clean-cut partnership, and (5) open confederacy model.\r \nThese variations indicate that at that place is much regeneration occurring with respect to delivering m?banking/m?money services. Although innovation is important, at some point, normalisation would be needed to support interoperability that would upgrade services among customers (GSMA, 2008a).\r\nIn fact, of the flipper models mentioned, the open federation model is considered by Goswami & Raghavendran (2009) as the close to flexible and driving since it allows for a partnership in the midst of all banks and telecom companies while sharing a common platform for m? banking. The platform then expands the coverage of mobile banking and gives the unbanked a freedom to choose with whom to maintain an account.\r\nThe other implication of the variety of existing models is that it creates different regulatory arrangements depending on the nature of partnerships between telecommunication carriers and financial institutions. In the drive of SMART Money in the Philippines, for instance, the banking regulations have complied with by its banking partner, whereas the telecommunications aspect is addressed by the telecommunications provider.\r\nA regulatory distinction however occurs once there is e?money issuance by a telecommunication company or non?bank entity through the telecommunications operator (Lyman, et al. 2006), as was the case with cosmos Telecoms G?Cash. In both cases, they had to work with financial regulators on banking regulations it was not antecedently concerned with.\r\nMobile phone payments is a popular and most preferable way of sending and receiving money in Africa since the extensive studyity of the continents population are prescript dwellers or uneducated (Ayo, Ukpere, Oni, Ometo, & Akinsiko, 2012; Mangudla, 2012). The concept of mobile money transfer dates back to the history of telecommunication and banking industries.\r\n at that place are collaborations between the two industries for the facilitation of MMT service (Ayo et.al, 2012). M-PESA was the offshoot MMT service in Africa, which was introduced by Safaricom of Kenya (A Vodafone partner) in 2007. M-PESA (M refers to mobile, and PESA refers money in Swahili language) can be accessed from the different outlets such as the headquarter, main branches of the company, or an authorized business outlet.\r\nSafaricom registered over 20, 000 consumers for M-PESA within the prototypal month of introducing the service (Hughes & Lonie, 2007), and the egress reached more than 15 million users of MMT in Kenya after five years of launching (Michaels, 2011). He contends that there are some(prenominal) factors behind the wide adoption and includeance of this service by the users including rapid migration to cities for work, a significant unbanked number of the populace, the credibility of the service provider, and finally their commission towards families in home villages.\r\n therefore, as maintain by Hughes & Lonie, (2007), the M-PESA is primar ily knowing for the unbanked populace in Kenya. The MMT also was afterwards introduced in several African countries such as Nigeria, South Africa, Tanzania, Ghana, Somalia among others. The success of these services in South Africa and Ghana were less than the Kenyas M-PESA success (Tobbin, 2010).\r\nMMT IN SOMALIA:MMT service in Somalia was first introduced by GOLIS , HORMUD and TELESOM telecommunication companies running(a) with puntland, south central Somalia and Somaliland respectively. SAHAL and ZAAD money transfer was the first product; however, EVC, the hormud version of MMT, was illegalize by al-Shabab Group. The hormud company later introduced a more advanced service named EVC Plus.\r\n separate telecommunication service providers later offered mistakable products with different brands. For example, Nation link offer E-MAAL and somtel offers E-DAHAB services respectively. The lack of effective brass in Somalia affected the necessities of the life and the telecommunica tion industry filled the governmental first step by introducing revolutionary technologies (Osman, 2012).\r\nThe industry provides several services such landline, mobile phones, meshwork and mobile banking. The mobile banking or what we can refer to mobile money transfer is very popular in the most sophisticated and active people in Africa with regard to mobile phone payment (Osman, 2012).Many diverse factors direct to the adoption and acceptance of these MMT services in Somalia.\r\nOne major reason is that the banking systems in the country are very limited. In addition, there is much risk for caring cash since the country is still politically unstable and retrieve from more than two decades of chaos and genteel war (Mohamed, 2013). There are Brobdingnagian remittances sent by the Somali Diaspora back home to their families, friends, relatives, or business associates.\r\nThere is also huge migration to the major cities because of frugal crisis, famine, droughts, and job seek ing. All these factors can contribute to the acceptance and usage of MMT service by the Somalis as they were behind its usage in other countries especially in Africa. There are limited empirical studies on the state of art of MMT adoption in the country.\r\nSayid, Echchabi, and Abd. Aziz (2012) examined the mobile money acceptance in Somalia by drawing on the tammy model. Sayid et.als (2012) study suggested that perceived service program and shelter positively affected the attitude towards mobile banking, whereas social influence and perceived usefulness significantly and positively influenced the intention to accept mobile money.\r\nFurthermore, their study suggested that perceived free of use had positive effect on perceived usefulness of mobile money. Sayid et.als (2012) experiment size was very small (N=100) which is elusive to draw a statistical final stage from it. In addition, this study looked at the MMT in a broader scope.\r\nHowever, their study provided useful insi ghts about the factors influencing the acceptance and adoption of MMT in the country.The genuine study will examine the trends, challenge and future of mobile money transfer and banking in puntland. The study will center sahal service as particular as there is no such in depth analysis in this service before.\r\nThis service has 597,000 sahal service active subscribers which do mobile money services across puntland, similarly it has 86,000 active mobile payment subscribers which use sahal payment as their first choice paybills.The study will rivet on these customers, the regulation and the mobile network operators to study the trends, challenges and future of this service.\r\n'