The simplicity of mobile money services is one of the reasons for its popularity. Anyone with any type of phone can consume mobile money services by registering a mobile wallet, which serves as a store of value. Mobile money users can also send and receive money, make payments and consume myriad services including insurance, pensions and loans from the mobile phone.

Mobile money service is organised around several players, namely the money phone provider, typically Mobile Network Operators (MNOs) who are licensed as Electronic Money Issuers (EMIs) by the Bank of Ghana. MTN Ghana, Airtel Tigo and Vodafone Ghana are all MNOs offering mobile money services. Furthermore, Ghana Pay is offered by a consortium of banks in Ghana, while G-money is a service by GCB Bank, and Zeepay, a Fintech company. These six companies are serving over 27 million registered mobile money accounts, with MTN holding the title of market leader.

Mobile money agents are another important part of the mobile money service architecture; they play a crucial role as an intermediary between EMIs and mobile money users, especially when exchanging cash. The prominent role played by mobile money agents makes them the face of mobile money.

Although mobile money agents provide many services, one of the most popular services they provide is called cash-in and cash-out. This service allows a mobile money user who wants to withdraw cash from a mobile money wallet to execute what is called a cash-out by following prompts to authorize the mobile money agent to debit a stated amount of cash from the user’s mobile money wallet. Once the authorization goes through, based on the availability of funds and security checks, the mobile money agents will give the client the said amount in cash. Essentially the mobile money agent is serving as a “human ATM” dispensing cash to users. For the mobile money agents to perform this function, they must have sufficient cash.

If, for some reason, they do not have this cash in the till, the cash-out service does not work. On the other hand, if a client wants to deposit funds on their mobile money wallets or send funds to a third party, the mobile money agent needs to perform a cash-in function. In this direction, the mobile money agent will accept physical cash from the clients and, in return, credit the clients' mobile money wallet with the said amount or transfer funds to a third party on the client’s behalf. The mobile money agent can only perform this function of cash-in if they have enough electronic money on their mobile money agents’ wallets, called an e-float. If for some reason there are no funds on the e-float, the mobile money agent cannot provide a cash- in function.

Mobile money agents’ liquidity challenge occurs when they do not have sufficient cash to provide cash-out service or enough funds in their e-float to offer cash-in services. Unfortunately, several mobile money users experience this challenge when they visit mobile money agents to transact business. Mobile money agents earn their revenue through commissions on transactions, if they cannot perform transactions due to a lack of physical money or funds on their e-wallet, it means less revenue for them, which in the long run impacts negatively on their business.

There are no easy answers to solving the mobile money agents’ liquidity challenges. Low operating capital means some mobile money agents do not have physical cash or funds on their e-float to serve their clients. Secondly, some mobile money agents do not have the skills and knowledge to correctly predict the optimal physical cash or e-float amount they need to maintain to be able to service clients comfortably. Also, the high incidences of robbers targeting mobile money agents makes it a risky business.

Several solutions are proffered to solve this mobile money agent’s quagmire. First, EMIs, through super agents; agents who are more extensive and endowed with more resources, can support agents with physical cash and e-float top-ups on demand based on agreed business arrangements. Second, mobile money agents’ operations should have technology embedded to properly record their transactions and spot trends to predict their cash requirements. Third, some FinTech, such as Onango recognizing this liquidity challenge provides mobile money agents with short-term loans to deal with physical cash and e-float demands. Lastly, some banks and financial institutions, including microfinance, also supports mobile money agents with on-demand liquidity support.

In conclusion, mobile money agents are now firmly interwoven into our society, playing a pivotal role in facilitating mobile money transactions, especially cash-in and cash-out services, therefore, any innovations that can help them solve their liquidity challenges will go a long way to sustain the growth of mobile money as a tool for development.

Kwami Ahiabenu, II (Ph.D.) is a Technology Innovations Consultant