In 2012, during my DiploFoundation and Internet Society Next Generation Leaders fellowships, I was introduced to the concept of mobile money, particularly M-Pesa in Kenya. At the time, the idea of revolutionizing financial transactions through mobile phones was fascinating, but it remained a theoretical concept to me; something to be studied and understood academically. Fast forward to the summer of 2024, when I had the opportunity to experience mobile money firsthand in Ghana. This experience was eye-opening, revealing the profound impact that mobile money, or MoMo as it is known locally, has on everyday life in the country.

What I discovered in Ghana went far beyond the academic understanding I had gained years earlier. Mobile money has not only transformed financial transactions by offering convenience and accessibility but has also empowered underserved communities, particularly women, in ways that are truly inspiring. However, this article is based on my personal observations in places like Cape Coast, Accra, Kumasi, Offinso, and Tema, and may not fully capture the diverse experiences of all Ghanaians.

Now let's dive in and examine workings of mobile money.

How mobile money works

Mobile money is a digital financial service that transforms mobile phones into electronic wallets, allowing users to deposit, send, and receive money conveniently. With mobile money, users can perform a wide range of transactions, such as transferring funds to others, paying for goods and services, and even saving money, or even applying for microloans, all from their mobile devices. Accessible through USSD codes or mobile apps, the service is user-friendly, even on the most basic phones.

Mobile money leverages digital technology and non-bank channels, including mobile network operators, fintech companies, retail outlets, and dedicated MoMo agents; to provide financial services to customers who are often beyond the reach of traditional banking systems. All over Ghana,  mobile money agents facilitate various transactions such as cash-ins (converting physical money into electronic cash), cash-outs (converting electronic cash into physical cash), and cash deposits (adding cash to a mobile wallet or bank account). These agents operate on behalf of licensed mobile money operators or deposit-taking financial institutions, playing a pivotal role in extending financial inclusion to underserved communities.

Ubiquitous convenience

One of the most striking aspects of mobile money in Ghana is its widespread usage. From bustling markets e.g., Kejetia in Kumasi to modern restaurants like Buka in Accra, from taxi drivers to gas stations, almost everyone and every business seems to rely on MoMo. I believe the simplicity of the system is a key factor in its success. For many people, especially in rural areas where traditional banking services is limited, MoMo bridges the gap between the unbanked population and financial services, offering an accessible platform for savings and payments. 

Empowering women through mobile money in Ghana

Remarkably, MoMo has become a powerful tool for financial inclusion in Ghana, particularly for women. In many parts of the country, women have historically faced barriers to accessing traditional banking services.These barriers range from limited physical access to banks to cultural and societal norms that have traditionally excluded women from formal financial systems. However, MoMo is helping to bridge this gap, providing women with the tools they need to gain financial independence and actively participate in the economy.

Transforming women into community bankers

One of the most transformative aspects of MoMo is its ability to empower women by turning them into community bankers. In both urban and rural areas, women are increasingly becoming MoMo agents, managing transactions such as cash-ins, cash-outs, and cash deposits for their communities. This role not only provides them with a source of income but also positions them as key financial intermediaries within their communities.

For instance, in Offinso, a town in the Ashanti Region of Ghana, women are playing a vital role in the financial ecosystem by operating as MoMo agents. These women are often the primary point of contact for financial services in their communities, helping their customers to convert physical cash into electronic money, access funds, and perform various other financial transactions. In our case, we found that all our cash-out transactions were conducted by female mobile agents, who were pleasant, responsible, professional, and very inspiring.  This role gives them greater control over their own finances and allows them to contribute significantly to their local economies.

Financial independence and empowerment

Furthermore, becoming a MoMo agent provides women with a steady income, which can be a significant step towards financial independence, especially in areas where employment opportunities are limited. This financial independence allows women to make decisions about their lives and their families without being solely dependent on others. Additionally, by handling financial transactions daily, these women gain valuable financial literacy skills, which further enhances their ability to manage their own money effectively.

Moreover, the presence of female MoMo agents has a broader social impact. It challenges traditional gender roles and demonstrates that women can successfully manage and operate financial services, even in male-dominated environments. This visibility can inspire other women and girls in the community to pursue similar opportunities, creating a ripple effect of empowerment.

While mobile money in Ghana has brought significant benefits, particularly in empowering women and extending financial services to underserved populations, it is not without its challenges. Let us now discuss some of the key issues that need to be addressed to further improve the MoMo system.

Dominance of MTN and limitations of other networks

During my experience, it became clear that MTN is the most dominant mobile money provider in Ghana, followed by Telecel, AirtelTigo, and then other networks. Notably, MTN’s widespread availability made it the go-to option for many merchant transactions. However, there were instances where paying with Telecel was not possible due to network limitations or merchants not accepting Telecel mobile money. In fact, some merchants only accepted MTN mobile money, further complicating the experience for users on other networks.

This lack of uniformity across different networks can be a significant drawback, especially for users like me who rely on a particular service provider like Telecel. It also highlights the need for greater interoperability and acceptance of multiple mobile money platforms to ensure users are not inconvenienced by such limitations.

Reliability, agent availability, accessibility, power grids, and security concerns

Another recurring issue is the reliability of the service. During my time in Ghana, there were instances when the mobile network was down, causing significant inconvenience. As such, MoMo transactions were delayed, and in some cases, it was impossible to complete them. For instance, in one situation I encountered, a transaction took almost 24 hours to be completed, and there was no explanation for the delay. Such delays can be frustrating, especially when users rely on MoMo for urgent transactions. This highlights the need for improved reliability and communication within the mobile money system, ensuring that users are informed of any issues that might affect their transactions.

An additional challenge is the availability of mobile money agents. While MoMo agents are generally accessible, they are not always available, especially after 5:30 PM. This can be problematic for users who need to access cash in the evening or outside regular business hours. In areas where agent accessibility is limited, this could mean being unable to convert mobile money to cash when needed most.

Moreover, while mobile money is accessible to many, there are still regions and communities where mobile network coverage is poor. For example, this was really problematic in parts of Kumasi, limiting the reach of these services.

Furthermore, mobile money services rely entirely on mobile devices, which need to be charged to function. However, in some parts of Ghana, especially in rural areas, electricity supply can be unreliable, with frequent power outages. This can pose a significant challenge for MoMo users who may find themselves unable to access their funds or conduct transactions when their devices are out of power. This dependence on electricity highlights the need for portable solar chargers or battery banks, to ensure continuous access to mobile money services even during power outages.

As with any financial service, security is a significant concern for mobile money users. There is a risk of scams, unauthorized transactions, and other fraudulent activities. Ensuring robust security measures and educating users on safe practices are essential steps in mitigating these risks.

To enhance the mobile money experience in Ghana, several key steps could be taken, which are discussed below.

• Improving network infrastructure – Investment in network infrastructure, particularly in rural and underserved areas, is crucial. This will guarantee that MoMo services are universally reliable and accessible, regardless of their geographic location.
• Enhancing interoperability – Mobile money services across different networks should be made more interoperable to prevent situations where users are unable to make payments due to network limitations. This would ensure that all users, regardless of their service provider, can transact seamlessly.
• Extending agent hours – Mobile money providers should consider extending the working hours of MoMo agents, or introducing 24-hour service points in key areas. This would ensure that users have access to cash when needed, especially in emergencies or during late hours.
• Regulatory support – The government and regulatory bodies should continue to support and foster an environment that encourages innovation in mobile money services. This includes ensuring fair competition among service providers, which can drive improvements in service quality.
• Education and awareness –  While mobile money is widely used, there is still a need for ongoing education and awareness campaigns. These should focus on teaching users about the full range of services available, as well as how to use them securely. Enhanced financial literacy will help users make the most of mobile money, avoid fraud, and use the services effectively.
• Leveraging AI for improved services – MoMo services can be significantly improved with artificial intelligence (AI). AI can help with fraud detection, customer support, network optimization, and personalized financial services.

How AI can further improve mobile money

Artificial Intelligence has the potential to further enhance mobile money services in several ways as discussed below.

• Fraud detection and prevention – AI can be employed to analyze MoMo transaction patterns and flag suspicious activities immediately. Machine learning algorithms can identify anomalies such as unusual transaction amounts, frequencies, or locations, to detect potential fraud. This can help in quickly addressing and preventing fraudulent activities, thereby improving the security of mobile money services.
• Customer support and service automation – AI-powered chatbots and virtual assistants can revolutionize MoMo customer support by providing instant assistance with common inquiries like transaction delays and network problems. These intelligent agents can efficiently resolve many issues, significantly reduce response times, and boost customer satisfaction.
• Personalized financial services – AI driven insights can enable the delivery of customized financial services, such as tailored savings plans, microloans, or investment opportunities. This  understanding individual user behavior and financial needs can help mobile money providers offer more relevant and beneficial services to their customers.
• Network optimization – AI can help predict and manage network congestion by analyzing data traffic patterns. This can lead to more efficient network management, reducing instances of downtime or slow transaction processing. AI can also assist in optimizing the placement of mobile money agents based on user demand and traffic data, ensuring that agents are available where and when they are needed most.
• Financial literacy and inclusion – AI-driven platforms can offer financial literacy programs tailored to different user segments. These programs can educate users on how to make the most of mobile money services, encouraging more informed financial decisions and increasing the overall impact of mobile money on financial inclusion.

While the benefits of AI integration into mobile money are substantial, it is crucial to address the ethical implications and ensure the responsible use of MoMo technologies. As mobile money services increasingly rely on AI, maintaining user trust and protecting privacy become critical priorities. We will now discuss key principles that can serve as a reference to guide the deployment of AI in mobile money services.

The importance of responsible and ethical AI use in mobile money transactions.

• Informed consent – MoMo customers must be fully aware of how their data is utilized when engaging with AI-powered mobile money services. Clear explanations should detail the reasons for data collection, its intended use, and who can access it. By securing informed consent, MoMo empowers users to make informed decisions about their personal information and its handling.
• Explainability and transparency – AI-powered MoMo systems must be transparent and explainable. This means that users should easily comprehend how decisions are made by AI, particularly in areas such as fraud detection or personalized financial advice as it relates to MoMo services and transactions. Transparency builds trust and helps users feel confident that AI is being used in their best interest.
• Data localization and language support – Localizing MoMo data by storing it within the country can enhance security and ensure compliance with local regulations. This also respects the sovereignty of data, making sure that user information is protected under local laws. In Ghana, this is particularly important to maintain the integrity of user data and to protect against unauthorized access. Additionally, making mobile money services more accessible by supporting local languages can significantly enhance user experience. AI can be used to develop multilingual interfaces that cater to Ghana’s diverse linguistic landscape, enabling more people to comfortably use mobile money services in their native languages.
• Bias mitigation – AI systems must be designed to prevent unfair or descriminatory outcomes, especially as it relates to exploiting Mobile Money services for micro-loans and credit systems. This includes ensuring that AI algorithms are trained on diverse data sets that reflect the entire user base. Regular audits and reviews should be conducted to detect and rectify any biases that may emerge with its deployment in MoMo services.
• Data privacy and security – Protecting MoMo user data is essential. Robust security protocols, including encryption, access controls, and regular updates, are vital to safeguard sensitive financial information processed by AI-powered MoMo systems.

Ultimately, a responsible approach to mobile money services can ensure that AI is used in a way that enhances services while respecting user rights and promoting ethical standards.

In summary, mobile money, or MoMo, has significantly transformed financial services in Ghana, offering convenience, financial inclusion, and economic empowerment, particularly for women. My firsthand experience in Ghana highlighted the widespread impact of MoMo, from urban centers to rural areas, where it has become a vital tool for daily transactions and financial independence.

However, challenges such as network reliability, limited interoperability between providers, agent availability, and reliance on unstable electricity need to be addressed. Improving infrastructure, extending agent hours, and enhancing interoperability are essential steps for advancing MoMo services.

The integration of AI offers promising solutions, particularly in customer support and fraud detection. However, the use of AI must be approached responsibly, ensuring transparency, data protection, and fairness.

Overall, while there are challenges to overcome, mobile money remains a crucial driver of financial inclusion and economic growth in Ghana. With targeted improvements and responsible innovation, MoMo can continue to empower communities and support sustainable development across the country.