Much has been said about how P2P mobile money transactions are transforming the economies of African countries, but the technology also has the potential to help entrepreneurs take their businesses to the next level.
This is according to Dr Rutendo Hwindingwi, divisional director for Sage East and West Africa, who says the explosion in mobile money across countries such as Kenya is helping to drive entrepreneurship and efficiency for small businesses.
Hwindingwi believes the single biggest benefit of mobile money is that it allows smaller businesses – even informal, microbusinesses without banking accounts – to take advantage of the benefits of digital payments.
With there still being plenty of room for mobile money to grow, Hwindingwi says small and medium businesses, particularly those in the retail and transport environment, could benefit significantly by driving more transactions through mobile money.
“In Kenya, cash still dominates transactions between many small and medium businesses and their customers. Many small businesses still like cash because they are reluctant to pay card transaction fees. However, cash has many disadvantages, and we expect more and more entrepreneurs to start opting for digital, mobile payments,” he says.
Cash has a range of drawbacks for businesses, he says, among the that it is expensive to manage, exposes them to the danger of theft, and means that they need to keep a float to give customers change.
Mobile and digital payments are much easier to track in a financial system, while remote payments are also possible. With mobile money and payments solutions for merchants maturing all the time, thanks to companies such as Kopo Kopo, which use mobile money systems as a platform for merchant services such as mobile payment acceptance and merchant cash advances.
The result is, says Hwindingwi, is that mobile money is slowly moving beyond the person-to-person arena into the business-to-business and business-to-consumer spaces.
Mobile money is a game-changer for companies and customers because it makes it so simple, safe and convenient to transact,” he says.