Mobile Money: Increasing Use by Addressing Trust

In the developed world, we are accustomed to having easy access to our bank and financial services. Though around the globe, it’s a different reality. Currently, two billion people remain unbanked without access to safe, secure and affordable financial services, according to GSMA’s Mobile Money Programme. Mobile money is a powerful tool that can help transform the financial lives of underserved populations. However, without greater use, mobile money will not be beneficial to individuals or to local economies and businesses. GSMA states that “by making mobile money more central to the financial lives of these users, greater financial inclusion, economic empowerment and economic growth can be achieved.”

One challenge to widespread adoption of mobile money is lack of trust among consumers and their financial institutions. I spend a week in Ghana interviewing smallholder farmers, community groups, and Village Savings and Loan Associations (VSLAs) about their access to banking and their use of mobile money. Many cited fear of scams and fraud as a reason for their distrust of financial institutions. As a result, individuals developed a preference to manage their financial lives through cash-based means.

Two stories of fraud, in particular, stood out to me. One was  a scheme conducted by a local Ghanaian bank offering a service to VSLAs to digitize their savings by sending a bank agent every two weeks to collect the funds and deposit them in a group account. However, upon collecting the money, the banking agent would disappear, along with the money, and the group would never hear from them again.

Second, I heard numerous stories of fraudulent activity via mobile money accounts – for example, you might receive a call from a stranger saying they sent you money by mistake, and asking for you to send it back, or that you won a large prize, and would need to send a small amount of money to redeem it. Though these instances are certainly the exception, rather than the rule, it was clear to me that for those I spoke with, fear and distrust of financial institutions impacted their financial decisions.

The benefits of mobile money are immense and usage continues to grow. As highlighted in GSMA’s State of the Industry Report on Mobile Money report, more than half a billion mobile money accounts were registered as of the end of 2016, with more than 170 million active accounts around the globe. By continuing to work to address the sentiments of distrust in the community, mobile money can continue to be a preferred method of payment for users around the globe.