It seems that the entrance to financial nirvana is guarded by a Hydra called Mobile. Like the Lernaen beast, its short simple name belies its many heads. The obsession with mobile as a financial tool has taken on proportions that even mythical creatures would be impressed with. For myth is a large part of the story. Myth, misunderstand and magic.

The myth of mobile lies in the obfuscation of financial prowess by technical wizardry. There is no doubt that the mobile phone (and here I mean the combination of a mobile handset with the network) is a modern wonder. Especially in developing economies. However, this wonder as a communication mechanism should not be directly applied to its capabilities as a financial tool.

How many times have you heard the quote that country X has a banked population of only Y but  has Y* (big number) mobile phone subscribers. The argument is that by allowing the mobile  phone to be used for banking services will increase the number of banked persons in the country dramatically. This is the head of the Hydra. What is a banked person? What services will the mobile phone unleash to create this banked person? Let's take a look at the magic.

Number one: Money transfer. M-Pesa has changed financial services forever by showing us that  easy money transfer is an essential financial product. However, even this is a bit of  obfuscation. Actually, it is “domestic” money transfer. International (cross border) money transfer is a totally different head of the beast, and here it is not M-Pesa that rules, but rather Western Union. The obfuscation continues.

CGAP (http://www.cgap.org/p/site/c/template.rc/1.26.10908/) has just released a research  that shows that even M-Pesa, when released in Tanzania by sister company Vodacom is a  different head of the beast. Although fundamentally, still domestic money transfer, the research shows that everything else is different. The pricing is different, the marketing is different, even the technology is different.

Number two: Mobile banking. A bank is an institution that operates under the rules and  regulations of the relevant financial authorities within a country. Except for the European  Union (EU), the authorities in every country have individual ideas on what rules they would  like their institutions to run by. There is no universal banking law. So, mobile banking, by  definition will be different in South Africa and Ghana as MTN (the continental mobile banking champion) has found out. In South Africa, MTN's Mobile Money is a joint venture with one bank, Standard Bank.

In Ghana, it is a partnership with nine banks. In neither country is MTN a bank. Wizzit is a  mobile bank, but it is not a mobile network operator (MNO). It is a bank that uses mobile  phones as an interface to its customers. MTN is a MNO that uses its branding and network to  provide an interface to the customers of its banking partners. These are very different  heads to the mobile beast.

Number three: eCash. As I explained in my previous article, eCash is the money that you move  from the physical world into the electronic. In this specific case, into a mobile wallet of  sorts. You can then electronically move this eCash electronically to anyone who has the  ability to also deal in this specific type of eCash. eCash is particularly effective when you need to move small amounts of value a long distance.The best example of this is once again M-Pesa.

The “money” that is transferred from one person to the next is eCash. It can only be used  within the Safaricom system or changed into real money at Safaricom agents. Zain has its own  system of eCash for its customers. So eCash is not some universal panacea. In most countries there will be as many eCash systems as there are MNOs. Each eCash system will be able to be used in different ways and with different people.

Number four: Technology. The word “mobile” is a simple, easy word that hides a host of  complexities that confuse and baffle. As most people know, it is possible to transact by  SMS. But did you know that M-Pesa uses “SIM Application Toolkit” technology? MTN uses USSD.  Are you aware that there are various versions of USSD? Then for the more expensive handsets  there is WAP and various Applets that can be loaded onto the phone. Each of these technologies has rules and exceptions, none of which explained to users who will simply tell you that they are using mobile.

In Greek mythology, it was Hercules who put paid the Hydra thus rescuing local villagers who  were terrorised by it. Does the financial industry need a Hercules to trim down the many  headed mobile monster who is beginning to terrorise the villagers? Or, in a modern version of the myth, will it trim itself from a monster to a wondrous beast of burden that assists us labourers with our financial toil?.