The widespread reach of affordable Internet enables mobile phones have increasingly enabled the consumers to have a direct access to the Internet. The dramatic fall in the price of mobile devices and falling prices of data services available on a prepaid basis are the main reasons behind it. These two are also responsible for the effectively Internet access via mobile in all developed and developing countries. The Internet enabled mobile phones are to be the basic handsets of tomorrow.
Mobile financial services are very likely to become the next big thing that will attract millions of consumers all over the world. There are three kinds of mobile financial services:
Mobile Banking: It enables customers with existing bank accounts to get connected to their bank or financial institution over the mobile network. They can use standard banking services such as bank account management (check balance, view transactions, etc.), credit / debit card management with it.
Mobile Payment: Enables customers to make credit card payments and bill payments any time anywhere, from either a bank account or a mobile wallet.
Mobile Money Transfer: Transferring Money via international or national remittance hubs from and/or to a real bank account or a mobile wallet. It is is a peer to peer form of mobile payment mechanism which is most successful among other kinds of mobile transactions.
As the use of Internet is expanding day by day, consumers are becoming more comfortable with using their handsets for increasingly sophisticated purposes, which also leads towards adoption of electronic channels for financial services. Today’s successful payment services have been built using certain mobile-specific channels that even basic handsets could support. Moreover access to the Internet will enable providers to offer solutions that do not depend on the security solutions offered using the SIM card in the phone. The growth of the mobile Internet may cause a boom in a new generation of branch less banking providers, raising substantial questions about risks to consumers, as well as the future shape of the competitive landscape.
It is estimated that there will be more and more people within the reach of wireless communications in next few years. Devices like mobile phones, which require less energy than PCs and ATMs and which can be recharged by windup or solar power, would play an increasingly important part in mobile finance.