Mobile money is the biggest money transfer service in the country; and just last year (2013) alone about $640m is believed to have been exchanged through the service. Also, there have been  innovations into mobile money to ATM cash outs like this recent one by MTN. Most banks use third party money transfer services i.e. Money Gram, western Union and a few others. Although these account for a good percentage of international money transfers they are no match for Mobile money when it comes to local money transfers; a fact which doesn’t go down well with some bankers. Some Banks have partnered with a few Mobile Money providers in the money transfer business; a partnership that allows the bank to act as a Mobile Money agent. This partnership is good but banks could do with more for example direct account integration (Mobile Money to bank account and vice versa.)

So banks are thinking…

Instead of withdrawing money at the ATM and then looking for the nearest Mobile Money agent to credit your Mobile Money account so you can send money to one of your relatives; why not walk into an ATM, instruct the bank to do the sending and instruct the recipient to receive it at the nearest bank’s ATM. This method is way faster and more secure with the added guarantee that the bank will not run out of ‘float’ like some Mobile Money agents.

What are their chances?

Good. A few people will use the service and with time the numbers will grow especially in urban areas where there is a higher number of the banked class. Such a value addition service has the potential to also lure potential clients to the bank which is a big plus for the bank.

It’s all not so rosy

ATM numbers and spread is a big factor in this service. Mobile money is ubiquitous because it is virtually everywhere, we even forgot how life was before mobile money. For a successful ATM fund’s transfer service, the bank should either have a large number of ATM’s or be in partnership with a bank switch network like Visa or Interswitch which would avail other bank’ s ATM’s on the network to the service.

To the future

Much as they have been pushed in a difficult position by Mobile money; it is refreshing to know and see that banks are innovating and trying out some new ventures a thing they are not known for.