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Mobile money is not Airtime. Here's why.
I have recently had conversations with a few curious people about the difference between Airtime and Mobile money.
This is a short post to show the difference between mobile money and Airtime. As a caveat, this article is based on my experience using Airtime and Mobile money. It is also based on my experience building for Airtime and Mobile Money and enabling people to transfer from a high-level app and an API.
Airtime initially was created to enable subscribers of a mobile network to call others for a predefined number of minutes depending on the value of the purchased Airtime.
First things first, if you live in North America, it might sound strange that people have to pay for each minute they call. But that is the case because of prepaid (Common in Africa) Cellular business models vs. postpaid (common in North America). So people in some parts of the world need to pay for each minute they spend talking on the phone, and that is how Airtime and the name Airtime was created.
But now, Airtime can be used for more than just calls. Airtime, or more rightly, Credit can be used for:
In fact, many Startups are building solutions that enable people to pay for products and services using Airtime and to exchange their Airtime for cash.
The significant difference, though, between Airtime and Mobile money lies in the support. Airtime is mainly issued by a telecom provider and can, in most cases in my experience, be only spent within that mobile network. This is not the case with Mobile Money. Let's see how
With Mobile Money, I assume that some Mobile Network Operators (MNOs) came together and decided to offer a way to transfer real money between themselves without Banks and probably supported by GSMA. Unfortunately, this is not a history lesson, so I did not care to look up those details.
However, Mobile Money or MoMo, for short, is real money that holds value equal to a predefined local currency. More like Stablecoins, for those familiar with Crypto. It can be used to pay for items, and most times, it does not require internet to be spent, transferred, or received.
The big difference between MoMo and Airtime is that MoMo works across multiple networks like MTN Mobile money, MPesa and others. Although specific mobile networks have standards for accepting mobile money, from the user's perspective, they can send it across the network and pay directly to merchants or individuals regardless of what mobile network they are on. Mobile money can also be used to buy Airtime 🤯.
I hope this was helpful. Please, let me know of any corrections or comments, as this was a very quick post.