Mobile money
Technology advancement has been tremendous in the 21st century. Many innovations and inventions have been in place that makes life easier for people. Technology in the communication sector has improved such that people can be able to communicate via mobile phones, send picture messages or have video calls unless one is connected to the internet. Therefore, such kinds of technological enhancements have not only made life easier but have encouraged economic empowerment in most countries.
United Kingdom is one of the countries that have adopted various technologies using the mobile phone. Currently, considering the large population a new, ideology on mobile money transfer has been identified and can be used to make issues of transferring money easier. Kenya is one of the countries that introduced the idea of mobile money, which Kenyan locally refers to as M-Pesa. When the technology picked up and was efficient, other countries adopted the idea. In this case mobile money transfer is a system whereby transactions can be made via phones. In this kind of transaction, the mobile owner or the person who is in participating in the transaction does not have to access a bank account. There are only three things that one should have, an active phone, a registered simcard or line, and money. Therefore, throughout the paper, the reader will understand how the concept works with its advantages and disadvantages.
Before a company can start mobile money exploration, it is important to understand the kind of people in the area of concern. In this case, UK is a developed country with millions of people living within. Considering two states that are England and Wales, updated by 2012, the population was 56.1 million(2011 Census – population and household estimates for england and wales, march 2011 n.d., p.1) It was discovered that among the 56.1 million, most people were above 65 years. That means that out of every six people, one was aged 65 or above. When considering Wales alone, it was noted that there was a population of 3.1 million by july 2012 when the statistical data was updated. This group comprises of men, women, youth and children. When analyzing such a huge market it is vital to consider how many people appreciate using phones in this area. In the UK people, most people have phones that use Global System for Mobile Communications networks, to avoid being charged roaming fees (Hanzo 2008, para. 1). There are various mobile phone networks in the Uk, for example Vodaphone, O2 , T- Mobile orange mobile and Tesco mobile (Sung 2010, para. 8). Among these networks, Vodaphone is appreciated by many people. Its coverage is good as it can be accesses in 85 % of UK. In addition, other countries use the same network. This makes it easier to communicate internationally and locally at an affordable rate. In addition to its coverage is the fact that its speed is fast and consistent. Under rare occasions, can one get network traffic unless the company’s server has a problem. Such basic network infrastructure is important for a company that tends to carry out mobile money transaction.
When planning to start mobile money services there is need to identify the target market. Initially, it was proven that a higher percentage of people in the UK are 65 years and above. This age bracket consists of people who have retired and are not so energetic to stand in long ques in banks in order to deposit money or withdraw money. As discussed earlier it is important to note that, this innovation does not need a person to have a bank account. The people undertaking the transaction need to have a phone, and an identification card. The person who is making sending the money will have to go to a mobile money agent (in this case it is Vodaphone) and produce a valid identity card. Then the mobile money agent will use his verified phone to deposit money given to him by the client to his phone then send it the client’s phone. Depositing money should be free always. When the client who deposited money receives a message in his phone that confirms that the money deposited has been transferred to his mobile account he will follow procedure required for sending money to the person he want. This process will help old people access money easily and quickly from their loved once without having to undergo the procedure of bank ques. In addition, in case the person who has received the many can not reach the mobile money agent due to personal reasons, he can send someone he trusts with his valid identification card or a drivers license and give the person who will withdraw money the accounts pin number and he will be allowed to make the transaction. In the end, the system will be advantageous to people who are busy and want to get money quickly (Jack & Suri 2011, p.2). In addition, the target market includes the young who are always busy and may get emergencies anytime of the day or night. Unlike banks that work during the day only unless one wants to withdraw money via an ATM, mobile money agents have no work limit. The agent can work as long as she/he wants because the network coverage is always on 24 hours. For example, most young people like going for parties. They may run short of money wherever they are and they may not be in a position to access an ATM around a club. Therefore, they can look for a mobile money agent, withdraw money, and use it for the night’s expense.
It is vital to consider the financial status of a country to determine if they are economically stable. Understanding and analyzing different levels of income of the people is vital in helping the company analyze the minimum amount of transaction fee that can be used to make different kinds of transactions. The reason being, mobile money agents must be in a position to have a given amount in their bank accounts to be in a position to carry out the transactions. For example, by 2011, the medium income salary of full time workers in the UK is £26,244 per year (Wages throughout the country: how does your area compare? n.d., para.3). This means that, the country is stable enough financially and can be able to sustain a number of agents in terms of issuing money to the subscribers. Therefore, these are some of the market trends that the mobile company should analyze in order to understand the level of transactions that can be levied on the clients and agents.
Budgeting requirements
Loan requirements
The project will inquire a significant amount of money to sustain those who will work in installing the new system. Some of the factors that will determine the loan include money to pay engineers, buying products that will be used for the installation process, money to train customer service representatives on how to handle the mobile service queries. An approximate value of £46,244 million will be required to meet the above named costs and others to make sure that the project becomes successful. These factors are the once that will determine the transaction cost to be levied on the people in order to help in paying back the loan with interests.
Transaction costs
Before undertaking any project, a company should be able to estimate the value of the project and have a clear picture of the returns it may get in the near future. In this case, there are certain things that the Vodaphone should consider. Fixed cost and variable costs should be discussed by stakeholders of the company to determine how effective they will be in case the projects runs along well. Fixed cost can be implemented while sending money to a person through mobile transaction. On the other side, variable transactions costs can be implemented depending on the amount that will be withdrawn.
Sample of Transaction Range, Type, and Customer Charge (£)
Minimum Maximum Transfer to other vodaphone users Transfer to unregistered users Withdrawal from
Vodaphone agents
10 49 0.5 N/A N/A
50 100 2 N/A 27
101 500 7 50 27
501 1000 25 50 49
1001 1500 25 50 55
1501 2500 27 75 63
2501 3500 30 75 67
3501 5000 30 75 75
5001 7500 43 75 83
Global financial climate
Considering the fact that the project will require a lot of money to in order to be implemented it means that, the country should be stable in that the vodaphone mobile company may be in a position to get back the money it used to implement the project.
Bibliography
2011 Census – population and household estimates for england and wales, march 2011 n.d., viewed 08 March 2013,
<http://www.agediscrimination.info/SiteCollectionDocuments/2011%20census%20-%20population%20and%20household%20estimates%20for%20england%20and%20wales%20march%202011.pdf>
Hanzo, L 2008, Global system for mobile communications (GSM), viewed 08 March 2013,
<http://www.scholarpedia.org/article/Global_system_for_mobile_communications_%28GSM%29>
Sung, D 2010, Which is the best UK mobile network of all, viewed 08 March 2013,
<http://www.pocket-lint.com/news/34070/the-best-uk-mobile-network>
Jack, W. & Suri T 2011, Mobile money: the economics of m‐pesa, viewed 08 March 2013,
<http://www.mit.edu/~tavneet/M-PESA-Final2.pdf>
Wages throughout the country: how does your area compare?n.d., viewed 08 March 2013,
<http://www.guardian.co.uk/news/datablog/2011/nov/24/wages-britain-ashe-mapped>
