Like every new technological solution, mobile banking services face a few problems and risks too. Some common impediments identified by CGAP and Microfinance Focus are:
* Difficulty in maintaining cash float: mobile money franchise operators (agents) often find it difficult to maintain enough cash to serve customers in rural areas who withdraw money after receiving electronic funds.
* Consumer-related issues: fraudulent activities as well as hidden charges are emerging concerns for mobile banking and you can read an informative article by CGAP about this. On the other hand, because of the simplified process of registering for mobile banking services, it is often difficult to establish the authenticity of customers.
* Regulatory hurdles: Central Banks are often wearing of allowing non-bank entities (mobile money telecom franchise operators) to receive or make payments on behalf of banks. This limits the service offering where a non-bank microfinance model is followed for mobile banking, such as Western Union’s partnership with mChek.
* Trust issues: consumers in less developed countries take time to get used to new mobile technology, especially since it involves trusting someone else with their money.
These are similar to the challenges faced by microfinance today.
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