Mobile payment adoption in East Africa is bringing businesses a number of new surprising benefits. With more businesses offering mobile payment options, consumers are left with cash in their pocket (figuratively and literally), and can make more purchases. This way, their cash on hand is freed up and their mobile device is another great way to shop.
Because 70% of the population of Africa does not have bank accounts or credit cards, it is very difficult for them to procure any of your goods or services without having ample cash in their pocket. Unfortunately, they rarely have ample cash on hand as Africans don’t carry large sums of money around; in fact, most don’t even have it in the first place.
Mobile payment systems are now bridging the gap between purchasers and businesses. Mobile money services like MPesa, Vodacom, Airtel Money and MTN Money are already flourishing throughout Africa. “More people have mobile money accounts than bank accounts in at least nine African countries. The continent as a whole actually leads the world in the adoption of financial services on mobile platforms.” (Harvard Business Review, Sept. 2014).
Putting Money in Consumer Pockets
In Eastern African countries like Rwanda and Uganda, MTN is already enabling customers to withdraw money from their mobile accounts, without even using a bank card. They send a message and receive a temporary pin on their mobile device to complete the transaction. This and other mobile platforms are putting money in consumers’ pockets like never before. In turn, you have a larger population of potential paying customers for your travel services.
According to Gartner Research (United States), Africa’s mobile transactions will reach $160B in 2016.
Tracking your Transactions Digitally
When consumers pay for your travel services with cash, you have to make a manual accounting of that transaction. This takes time and resources and also opens the door to data entry mistakes. With mobile payments, these transactions are captured digitally and are automatically documented and entered into your system. You can easily pull these records when necessary to settle disputes.
More Accurate, up to date Accounting of Capacity
Digital transactions via mobile payment are logged instantaneously after the payment goes through. This gives you an up-to-the-minute accounting of your travel service capacity at all times. Lagging cash-based transactions can take a while to process and can give you false capacity data which can cause you to oversell.
Moreover, mobile payment programs also provide you with a web-based log of every payment you received through MPesa, for example. You simply log into your mobile service provider’s website and access those records. This additional data reporting provides added peace of mind to you should you misplace a transaction record.
Refunds are Easier to Complete
With cash-based transactions, you are hard-pressed to provide ample refunds when necessary because you need to find a way to send re-payment back to the consumer when the individual likely does not have a bank account or credit card. With mobile payment systems, it is easy to transfer the money right back to their mobile account.
As the uptake of mobile payment platforms and usage continues to take hold across Africa, you want to be sure you are putting yourself in the best position to succeed. Accepting mobile payments enables you to capture the business of a far greater potential customer pool than ever before. You become that much more attractive to your consumers, and in turn, you operate more efficiently and accurately by dealing with digital transactions instead of hard to track paper currency.