One of the driving forces in the ever-evolving digital world is mobile money. In fact, it is slowly overtaking traditional bank services in various countries. In this post, we will look at how mobile money is helping businesses across the forex industry.
But, before we proceed, let us answer the basic question – what is mobile money?
What Is Mobile Money?
Mobile money is money that is stored in an electronic wallet. Typically, this is money stored in mobile accounts of telecom companies, similar to the airtime that people recharge.
Unlike airtime credits that are used to make calls and send SMSs, you can transfer or withdraw mobile money.
How Does Mobile Money Work?
To start with, you should register for a mobile money account with your telecom provider. Then, deposit money into your account. Afterwards, you can conveniently manage the money using your mobile phone.
You can either deposit money via your bank account or pay cash to a mobile money service agent around you to get your account.
Fortunately, mobile money has evolved from a money system linked to phone numbers and telecoms to becoming an electronic wallet that can be operated from a mobile phone.
Although the majority of mobile money services still require phone numbers to work; however, they are operated mainly via mobile applications. Besides, telecoms are not the only providers of mobile money services.
The Mobile Money And Forex Connection
In the forex industry, traders are all about making money which is why they trade currencies. And, there are two things involved – you deposit money to trade and withdraw money when you make a profit. This is where mobile money comes in.
With mobile money, forex traders now have another option to deposit and withdraw money from their forex trading accounts. Although forex brokers often feature multiple payment methods apart from bank deposit/withdraw, it is not as easy as the mobile money method.
Why Is Mobile Money A Preferred Payment Method In Forex Industry?
Mobile money is one of the most convenient payment methods. Anyone can utilize mobile money, and there’s no need to operate a traditional bank account. As mentioned earlier, there’s the option of making cash payments to service agents who will, in turn, credit the customer’s mobile money account.
In countries where mobile money is widely accepted, it is not challenging to locate a service agent. In fact, there’s likely to be one on every street, and all the mobile money agent requires for account crediting is the customer’s phone number.
Forex: Mobile Money Vs Other Payment Methods
Apart from local bank transfer, most deposit and withdrawal methods on forex trading platforms are payment gateways and e-wallet providers like PayPal, Skrill, Neteller, etc.
For these platforms, registering an account often requires filling of somewhat lengthy deposit/withdrawal forms. Not to mention, some deposit and withdrawal transactions are not instant. Also, they often attract relatively high transaction fees compared to using mobile money.
So, mobile money enables businesses in the forex industry to receive deposits and process withdrawals for their customers swiftly. Moreover, since customers can quickly deposit or withdraw money from their forex accounts, they also have enough time to trade and make profits. No critical signals will be missed while waiting for a deposit or withdrawal to be approved.
However, despite mobile money advantages, only a few forex brokers accept mobile money. As a result, a forex trader who wishes to trade using mobile money has limited options. The reason can be pegged down to some of the drawbacks that are involved with using mobile money.
What Are The Drawbacks?
The major drawback here is the availability. How available are these mobile money services to people? To make use of mobile money, you are likely to need a smartphone (Android or iOS) to be able to download and install their app.
Not everyone makes use of smartphones, but for a forex trader, they are likely to. However, the problem here is from a general perspective as mobile money services are not for the Forex industry alone but the entire finance industry.
Additionally, there’s still the problem of ignorance and illiteracy among people when the topic of forex trading is raised. This is similar to sensitization problem in the cryptocurrency industry, which has led to a ban in various countries.
Conclusively, mobile money is significantly helping businesses across the Forex industry; however, mobile money’s success rate depends on its acceptance by forex brokers. Besides, the mobile money service has already had a massive impact on other finance industries, and the same can be achieved in the forex industry.