Use of Mobile Money Payments by Enterprises - Essay Example

Use of Mobile Money Payments by Enterprises Institution Affiliation Date Topic: use of mobile money payment methods by enterprises in operations Introduction Roo Yori and Manuel Kaufamn, professors in in the University of Texas College of business, suggest that, “There are millions of consumers who are unbaked. They wait in lines to cash checks and pay bills, its highly inconvenient. A service like mobile payment saves them a lot of time and inconvenience.” (Yoris and Kauffman 141-164). Mobile money payments services generally refer to payment services where people can pay through mobile devices instead of paying through cash, cheques or credit cards. Consumers can use their mobile phones to pay for a wide range of both goods and services. Although the concept of not using coins and notes has been around for a while, the technology to support mobile payments has only become available recently. Mobile payment is now being adopted all over the world as opposed to the cash basis of paying due to the advantages in hold to the consumers and even sellers. It is now being used as a means of extending financial services to those people who live in interior places where there are no institutions such as banks to facilitate safekeeping of money. The aspect of paying for goods and services and conducting other transactions through mobile phones is important because of the developments in technological ways where all transactions are being computerized. It is however a very controversial issue because of the greater disadvantages that come with this new way such as the increase in cases of fraud and unauthentic transactions. Enterprises should adopt the mobile payment methods services to enable their customers to pay conveniently through their mobile phones and reduce the queues and resources such as time and additional labor. Using mobile money payments ensures security of the cash and in case of high amount transactions it reduces the bulkiness of the money. There is much at risk when people carry money physically to purchase goods and services. Crying bulk money physically attracts mugging and robbery incidences which can be avoided by use of having the money in the mobile phone. There is security to both parties as even the enterprise that is selling the products and services will not need to arrange for safe transportation of the cash to the bank as it can just be sent from the mobile phone to the back accounts. Where the amount involved is high it becomes difficult to carry it to the seller and this hinders the transaction. Mobile money payments solve this problem as even a high amount of money can be transacted through mobile phones. There however is an issue that the mobile transactions are charged at a cost which is charged on the consumers who conduct the transactions. According to Varshney Upkar associate professor at Robinson college of business, argues that, “the costs on transactions are burdened on the consumers only while the service providers and businesses laugh all the way to the bank” (12) .Although consumers are rational and emphasis on cost saving and maximizing satisfaction, the benefits of transacting through mobile phones greatly outweighs the charges levied. For example someone can transit 10,000,000 dollars in cash and get robbed while sending the money through the mobile would have costed him 2 dollars in transaction fees. Another issue is the rise in cases of fraudulent transactions where people are conned off their money by other people who send them unauthentic text messages telling them that they have received money which was not intended for them and they in turn return their own cash since their mobile money accounts may have had some money. Just like any innovation, this method does not lack innovation of ways to break the system. Providers of the mobile services are continuously improving systems to provide more protection to its customers and enterprises should also ensure the give proper and clear payment information to their customers. Despite the setbacks it is clear that enterprises should adopt mobile payment services to increase efficiency and smooth operations. Use of mobile payment services is fast and saves costs for enterprises. When people use physical cash to pay for goods and services, there is a lot of lengthy transaction which takes place. The cashier has to receive the money count it and then keep it aside and generate a receipt for the customer. This is a lengthy process which leads to long queues being experienced in places like supermarkets and malls. Kevin Jenkins managing director at Visa a research company says that, “why travel and use energy when just some simple keying of digits from the comfort of the living room can take care of that” (28) When customers pay through mobile money services, the process is fast saving time because the customers do everything themselves from their phone and the receiver on the other side just checks the system or the mobile transaction message to confirm the transaction. Enterprise’s also save a lot of costs through reduction of human resources that are employed to deal with the physical cash transactions. There is also an advantage in that the messages of the transactions act as evidences of transaction for both the enterprise and the customers and there is no need for a third party to witness the transactions or even the need for a receipt for that matter. There have been numerous concerns though about the reliability of the mobile payment systems due to malfunctions which when they occur they paralyses the money transactions leaving the customers with the old method of physical payment. Cynthia smith a financial analyst and head of technology and operations at Meta financial group, says that, “Hackers and computer specialists will always find a way of negatively affecting any new technological innovations as if it is made by man, so can it be altered”. (M Cynthia, 143) Any computerized transactions despite the aspect of time and resources saving, cannot be 100% reliable because computers and computer systems are developed, manipulated or operated by human beings and therefore there is room for error and improvements. However again the costs outweigh the benefits and the more the approach is adopted, the more improvements will be made to improve the satisfaction of both enterprises and customers. With continued explorations and innovations in the mobile payment systems, transactions are going to improve greatly and therefore enterprises should adopt the strategy to reduce operational costs and enhance speed and accuracy in transactions. Use of mobile payment is convenient to both enterprises and customers due to reduction of workload and also leads to increased services other than payments. Mallat Niina professor at University of Oslo suggests that, “It’s not about being richer or more powerful than our competitors. It’s not only about increasing sales or gathering the bigger market share, but it’s mainly about satisfying our clients to our best levels such that they remain loyal and grow with us.” (Mallat, 413-432) Customers find it convenient paying through mobile phones because of the following reasons. First they don’t have to be physically available at the enterprise in order to make the payments but only need to know the account numbers of the enterprise. This saves them the time energy and in some cases financial resources of going to the enterprise. Secondly mobile payments enable them coordinate payments with activities such online shopping and therefore they do not need to do anything physically. The enterprise on the other hand is able to keep track of transactions easily and make comparisons easily as the data goes straight to the system as opposed to keying physical transactions which increase chances of errors or intentional manipulation. There are several disadvantages to both parties in that to the enterprise the cost of acquiring the services of mobile money payment may be high since in some cases in may involve liaising with more than one service provider. Although it may be so, the service has a long term effect on the enterprise and after a period of time the benefits derived will be more than the costs that would have been incurred under the previous physical method. To the consumers, some applications of mobile payments may be incompatible with mobile devices. For instance they may only be able run on high end mobile phones which not all people can be able to acquire and maintain. This is however a challenge to the people that they need to stay updated with technology. The enterprises should also look into ways of availing the device to their customers in order to ensure all of them are able to make the mobile payments. Mobile money payments facilitate easy and convenient ways to customers and enterprise should use them to provide a wider range of services to its clients. Conclusion Evidently there is a greater benefit derived from using mobile money payments services to both enterprises and customers. The customers enjoy convenience, speed, a variety of services and save on time costs and resources. Enterprises gain competitive advantage in terms of efficiency of operations, Speed of transactions, saving on costs and get customer information such as their names and mobile phone numbers when they make payment transactions. They in turn use these details to conduct surveys and market through notifying customers of products, services and promotions. In the long run, despite the high costs of acquiring the services, enterprises save more costs and get more revenue than they would have. In addition their customers are satisfied by the services they get due to convenience. Businesses should therefore incorporate technology in their payment transaction systems and adopt the money payment service which will enhance the expansion of the business, enable them offer even greater varieties of services and ease operations. In the future the aspect of technology will greatly be a determining factor in the success of business and to succeed they will have to invest greatly in the technology of payments and transactions. Although there will be efforts from hackers and computer specialists to make the systems ineffective, Solutions and improvements will always be made. References Mallat, Niina. "Exploring consumer adoption of mobile payments–A qualitative study." The Journal of Strategic Information Systems 16.4 (2007): 413-432. Read More

Mobile money payments solve this problem as even a high amount of money can be transacted through mobile phones. There however is an issue that the mobile transactions are charged at a cost which is charged on the consumers who conduct the transactions. According to Varshney Upkar associate professor at Robinson college of business, argues that, “the costs on transactions are burdened on the consumers only while the service providers and businesses laugh all the way to the bank” (12) .Although consumers are rational and emphasis on cost saving and maximizing satisfaction, the benefits of transacting through mobile phones greatly outweighs the charges levied.

For example someone can transit 10,000,000 dollars in cash and get robbed while sending the money through the mobile would have costed him 2 dollars in transaction fees. Another issue is the rise in cases of fraudulent transactions where people are conned off their money by other people who send them unauthentic text messages telling them that they have received money which was not intended for them and they in turn return their own cash since their mobile money accounts may have had some money.

Just like any innovation, this method does not lack innovation of ways to break the system. Providers of the mobile services are continuously improving systems to provide more protection to its customers and enterprises should also ensure the give proper and clear payment information to their customers. Despite the setbacks it is clear that enterprises should adopt mobile payment services to increase efficiency and smooth operations. Use of mobile payment services is fast and saves costs for enterprises.

When people use physical cash to pay for goods and services, there is a lot of lengthy transaction which takes place. The cashier has to receive the money count it and then keep it aside and generate a receipt for the customer. This is a lengthy process which leads to long queues being experienced in places like supermarkets and malls. Kevin Jenkins managing director at Visa a research company says that, “why travel and use energy when just some simple keying of digits from the comfort of the living room can take care of that” (28) When customers pay through mobile money services, the process is fast saving time because the customers do everything themselves from their phone and the receiver on the other side just checks the system or the mobile transaction message to confirm the transaction.

Enterprise’s also save a lot of costs through reduction of human resources that are employed to deal with the physical cash transactions. There is also an advantage in that the messages of the transactions act as evidences of transaction for both the enterprise and the customers and there is no need for a third party to witness the transactions or even the need for a receipt for that matter. There have been numerous concerns though about the reliability of the mobile payment systems due to malfunctions which when they occur they paralyses the money transactions leaving the customers with the old method of physical payment.

Cynthia smith a financial analyst and head of technology and operations at Meta financial group, says that, “Hackers and computer specialists will always find a way of negatively affecting any new technological innovations as if it is made by man, so can it be altered”. (M Cynthia, 143) Any computerized transactions despite the aspect of time and resources saving, cannot be 100% reliable because computers and computer systems are developed, manipulated or operated by human beings and therefore there is room for error and improvements.

However again the costs outweigh the benefits and the more the approach is adopted, the more improvements will be made to improve the satisfaction of both enterprises and customers. With continued explorations and innovations in the mobile payment systems, transactions are going to improve greatly and therefore enterprises should adopt the strategy to reduce operational costs and enhance speed and accuracy in transactions.

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