MAKERERE UNIVERSITY BUSINESS SCHOOL FACULTY OF MARKETING AND HOSPITALITY MANAGEMENT DEPRTMENT OF INTERNATIONAL BUSINESS PROGRAM: BACHELOR OF INTERNATIONAL

BUSINESS BIB 3 GROUP B COURSE: E BUSINESS AND WEB DESIGN GROUP PRESENTATIONS

NAME 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. SSENYANGA AKRAM NALWANGA K JESSCA KWEZI PHILLIP KIVUMBI MARTIN SSEKABIRA JOSEPH MWESIGWA DANIEL ASHABA BARASHA DUNCAN MUDOOLA MUSA NAGGAYI SYLIVA MIGADDE ASHIRAF

REGN NUMBER 09/U/12472/EVE 09/U/12420/EVE 09/U/12377/EVE 09/U/10795/PS 09/U/10828/PS 09/U/12396/EVE 09/U/12336/EVE 09/U/12384/EVE 09/U/10811/PS 09/U/1632

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REQUIRED: THE KEY DRIVERS AND CHALLENGES FACING MOBILE PAYMENTS. CONSTRAINTS OF WIDESPREAD ADOPTION OF MOBILE MONEY TRANSFER.

As mobile phones proliferate in the developing world and Mobile Network Operators (MNOs) look for ways to diversify from voice and SMS, a prominent emerging service is mobile money a term used to loosely refer to money stored using the SIM (subscriber identity module) as an identifier as opposed to an account number in the conventional banking sense. A notational equivalent in value is then kept on the SIM within the mobile phone, which is also used to transmit payment instructions. The corresponding cash value is physically held by the MNO, a bank or another third party depending on the business model (Porteous 2006; Donner and Tellez 2008; Comninos, Esselaar et al. 2009). Mobile money transactions are usually made by customer payment of utility bills, (Umeme, Water, DSTv), school fees, hospital, Transport fare as well as regular payments like in supermarkets, restaurants and market purchases. This section of this work seeks to identify and present the key drivers to mobile payments; 1. Large mobile phone user base; Unlike, in the past whereby a few mobile phone users existed, today the trend is changing fast that even the ordinary peasants and third class citizens now possess mobile gadgets which are the sole drivers of mobile money transactions in todays mobile commerce. 2. Less charges/low costs; In trying to compare and contrast the charges that were levied during when one had incur relatively higher costs when transactions were made, another key driver of mobile payments is that they MNOs charge a slightly lesser cost than those days which has boosted the mobile payments in the mobile commerce. 3. Security; In any business arena, security is the most pressing issue that drives most business customers to adopt a favorable transactional model. Therefore, the illiquidity nature of mobile money and credit ensures a considerably lesser amount of risk that could lead to money losses which has driven many customers to mobile money payment.

4. Wider reach The network coverage that covers most areas in the fields of business, high places the possibility of reaching even the furthest places to be reached by the conventional banking systems that saves time and cuts distance in doing business. 5. Ubiquity of mobile phones The ubiquity of mobile phones whereby they can be used every where and at any time facilitates the conduction of business transactions easily at places and times of ones utmost convenience thus making it a driving force towards the adoption of mobile money payments. 6. Ease of access Once adopted, mobile money transactions ease access to ones personal needs compared to the conventional banking system whereby an individual has to look out for the nearest local area branch so as to make a transaction which could be time consuming. This has driven the faster adoption of mobile money payments. 7. Faster speeds The use of mobile money payments is far more speedy compared to the convetional banking system. This is because the time needed for clearing ones own finances for transactions is minimal compared to the ordinary cheque approving time and other procedures that delay payments. This has driven the faster adoption of mobile money payments. 8. Remote banking The adoption of mobile money payments has been driven by the need for remote banking by the patnerships made by the MNOs with some commercial banks. This gives room for customers on a given network to access their bank accounts to wherever they may be regardless of distance between one and ones own bank. This has driven the faster adoption of mobile money payments. 9. Close relationships with customers The adoption of mobile money payments has been driven by the proximity of the customers to their phones that facilitates induced transaction expenses that has driven the faster adoption of mobile money payments.

In as much as there are the above key drivers, the following are the challenges which are as follows; 1. Customer educational rate In as much as mobile money has been adopted at a terrific speed, there is a challenge to its widespread that is brought about by the low literacy levels exhibited by the majority customers. This makes it hurdle to most illiterate business men who find it difficult to operate transactions in the English language or even the ICT procedures. Thus hindering the faster adoption of mobile money payments. 2. Lack of a common technology platform for all mobile devices The platform that is available for the operation of mobile money transactions lacks common technological standards that can apply to all the MNOs that deal in mobile money payments. Thus hindering the faster adoption of mobile money payments. 3. Network coverage in some parts of the country In conducting mobile money transactions, there is achallenge that hinders the the adoption of the system that is brought about the coverage of specific MNOs operating in the country whereby some areas dont have connection masts Thus hindering the faster adoption of mobile money payments. 4. Network congestion especially in the Central Business District In trying to harmonise the system of mobile money transations especially in developing countries like Uganda, the systems are forced to carry more data than their capacities which leads to creation of congestion in the networks Thus hindering the faster adoption of mobile money payments. 5. Security concerns Since in any business arena, security is the most pressing issue that drives most business customers to adopt a favorable transactional model, it is still remains a challenge in as much as hacking can never be dealt with.
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6. Customer close in Many MNOS operating in mobile money transactions have a tendency of high customer retention and thus create a customer close in inorder to beat the competition. This has let to different charges across the inter network connections whilst conducting mobile money transactions. Other challenges 7. Inter network costs relatively higher 8. Higher liquidity preference of customers

Mobile money transfer is the transfer of cash/credit from one entity to another using a mobile device. The key MNOs operating mobile money payments in Uganda are MTN mobile money, AirtelZap, UTL- m sente and m pesa for safaricom in Kenya. More so, the MNOs have gone a step ahead to partner with some commercial banks like MTN Stanbic, UTL-DFCU, and Airtel Standard Chartered Banks. The following are the possible constraints of the widespread adoption of mobile money transfer; 1. Headset capabilities Mobile money transfer shall remain a non starter until certain tehnologies are available at a certain cost. This because many headsets in circulation lack the capability and flexibility to build Mobile money transfer applications hence constraining its wider adoption. 2. Convincing customers of the value proposition Mobile money transfer operators lack the initiative of proposing a stronger value in the minds of the customers unlike in the purchase of goods and services hence constraining its wider adoption.. 3. Common standards and interoperability The platform that is available for the operation of mobile money transactions lacks common technological standards that can apply to all the MNOs that deal in mobile money payments. Thus hindering the faster adoption of mobile money transfers. 4. Security concerns Since in any business arena, security is the most pressing issue that drives most business customers to adopt a favorable transactional model, it is still remains a challenge in as much as hacking can never be dealt with.

5. Network coverage In conducting mobile money transactions, there is achallenge that hinders the the adoption of the system that is brought about the coverage of specific MNOs operating in the country whereby some areas dont have connection masts Thus hindering the wider adoption of mobile money transfers. 6. Regulations Since mobile money transfers involve third party service providers, across countries, regulation becomes complicated. Bad regulatory policies run the risk of killing the whole industry therefore a hesitation by potential customers to adopt mobile money transfers hindered.