Mobile money and mobile banking are two distinct terms for a modern way of conducting cashless transactions. Most of the money deposit banks are now offering mobile banking and mobile money banking services. Both of these provide very similar bank transaction services. People often get confused about mobile money and mobile banking. Hence, it is very important to differentiate them so that people have a piece of complete knowledge.
This article will help you improve your understanding of the differences between these services, and which one best suits your financial needs.
So let’s lead off!
What is Mobile Money:
Mobile Money is a digital wallet service that runs through an app installed on the phone. This mobile money payment solution operates only. When the phone is connected to an internet connection. Mobile payment can be used without a conventional bank account. Of course, there are still charges, modalities, etc., but it is also more accessible than mobile banking.
It is a way to deposit and manage cash in an account connected to a phone number. It enables users to make cashless transactions. Using Digital banking app users can easily deposit money, buy items, pay bills and receive money. It primarily enables person-to-person, i.e. P2P payments that are easy and secure. Also, it does not invoice high taxes from the customer at the time of payment confirmation.
The service is quick, easy to use, secure, and can be used almost anywhere. Even when there is no bank nearby, with a cellular phone signal. This has increased the reach in rural areas.
This FinTech software solution enhances financial security and reduces the risks inherent in manipulating money, such as loss, theft or fraud.
What is Mobile Banking:
Mobile banking is also referred to as M-banking. Which essentially allows a user to open a bank account using their mobile phone. Mobile banking is an app-based digital mobile payment solution service. And is administered by the bank.
It is an extension of the conventional banking service. This mobile banking app allows their clients to make all sorts of transactions, locating ATMs, applying for loans, pay bills, and so on. Most mainstream banks now offer digital banking apps at all mobile app stores.
This enables its users to perform any transactions, check balances and deposit mobile checks remotely from any location using a mobile phone with internet access. The customer may also generate an electronic passbook or modify the account phone number using a mobile banking app.
It’s like having a bank in your hand, now you don’t have to wait in long queues at the bank for any transaction or any other work.
This Mobile banking solution possesses robust security. For login, payments and updates they text or email a code for authorization. What’s more, Mobile banking is regular banking but on mobile devices.
Main Differences Between Mobile Money & Mobile Banking:
- Mobile Money was originally established to increase financial inclusion for those previously excluded financially.
- Mobile banking requires a bank account number, while Mobile money requires the mobile number as the bank account number.
- The Mobile money allows for only P2P payments. Through this, people can easily pay, receive and deposit money using mobile phones & the internet. Whereas Mobile banking solutions allow all sorts of transactions, along with other services.
- Mobile money & Mobile banking both are the means of cashless transactions. Both enable users to pay bills or purchase goods online using a phone and an Internet connection. But mobile banking offers greater convenience for users. The user can access all the banking services at his/her fingertip without visiting the conventional bank or ATM.
- With Mobile Banking, withdrawal transaction functionality is not activated. While ATM withdrawal is an integral part of Mobile Money.
- Mobile Money acts as a mobile wallet and is an agent banking. Whereas mobile banking acts as net banking and is a branchless banking system.
- Whereas for mobile banking, one would have to open a formal account and provide other documents such as a valid utility bill and personal form of id. And it also requires initial funding for opening an account.
- Mobile banking services require an Internet-ready smartphone for transactions.
- Mobile money normally focuses on unbanked, to provide financial inclusion for the lower segment. Who can not afford banks or have been excluded by banks under their KYC or other commercial rules. But for Mobile banking services customers must own a formal bank account to utilize mobile banking service. Mobile banking only focuses on the customer who possesses an official bank account.
Wrapping Up:
Mobile money and mobile banking both offer digital money transaction service. Both offer individuals the ability to conduct separate banking transactions through mobile devices. Mobile money and mobile banking both are time-efficient and make it easier for users to do their jobs. With a bright future ahead for mobile money and mobile banking, Your fintech company might be the one to taste success with it.
