Mobile Money – A Potential Threat to Banks?

Abstract

Money, the medium of exchange has seen significant transformation over centuries. In the last few hundred years, money has been regulated by banks. Such regulation of the flow of money in itself has become a money making venture becoming the main stay of several kinds of institutions including banking institutions. The paper focuses on the emerging trend of the use of mobile devices to facilitate the payment of goods and services. This is essentially, using a mobile phone to perform some of the duties of traditional banks. This fast paced substitution of the mobile phone with traditional banking is sometimes viewed as a threat to the existence of banks in Ghana. The paper finds, through the use of empirical data and interviews, that although, banks may lose minimally in the short term, mobile money is actually more complementary and will only fast track the achievement of the goal of a cashless economy.

Monetary Policy Implications of Electronic Money Adoption: Evidence from Nigeria

“…Sinambela and Darmawan (2022) reinforce this perspective and suggest that using electronic money as an alternative to non-cash payment instruments can significantly reduce the growth rate of cash usage. Similar views are shared by Rogers (2005), Claessens et al (2002), and Kubuga and Konjaang (2016). On the contrary, Drehmann et al (2002), Fujiki (2020) and Fujiki and Tanaka (2018) argue that electronic money has minimal or no impact on currency usage, and the average cash balance does not decrease with the adoption of electronic money.…”

“…However, this contradicts studies such as Zhang and Ma (2011), Sinambela and Darmawan (2022), and Kubuga and Konjaang (2016).…”