How safe is it to pay fees using digital platforms?

A customer pays school fees through mobile money in Kampala. PHOTO BY GODFREY LUGAJJU

What you need to know:

  • It is back-to-school week where several parents and guardians strive to beat the long queues in banks that are synonymous with this period.
  • We explore why parents would rather brave such long queues than using digital platforms to pay their children’s school fees.

Breakdowns of digital platforms whenever there are increased transactions have partly lowered the uptake of otherwise marvellous innovations.
This perhaps explains why some parents or guardians would rather queue up for behind-the-counter transactions rather than use their handsets to pay school fees and other utilities at their convenience.

Behind the counter operation seems to provide some sort of guarantee that the virtual transaction is yet to attain.
However, according to a recent study by Digital Impact Awards Africa, Mobile Money Users save 19.3 million hours a month, a luxury that queuing up does not guarantee.

The report further reveals that at least 5 million regular users of mobile financial services in Uganda during a three-month period spent 7.1 man hours (296,390 man days) to clear simple financial transactions and saved 57.9 productive hours.
This is an average of 19.3 million hours a month that would otherwise have been spent on using traditional transactions payment means.

While releasing this study results, Mr Innocent Kawooya, the CEO of HiPipo noted that: “The growth of mobile financial services, digital business and the Internet of Things (IoT) is one of the things that will drive Africa’s prosperity by saving Africans a lot of productive time while performing many important but basic transactions.”

The simple financial transactions include: Person to Person Transfers, Transfer to Voucher (P2C): Transfer with voucher to someone not having mobile phone, airtime purchases by subscriber: purchases of airtime on personal phones via mobile money, Airtime sales by agent: that is airtime purchases done via a mobile money agent and bill payments: for example utilities (water, electricity), pay TV, taxes, school fees, online payments, travel and betting among others.

“When people make more use of mobile financial services, two things are bound to happen. First, they manage money more effectively – with new ways to save, make payments, access credit or obtain insurance.

Second, they spend less time taking care of simple financial transactions and concentrate more on productive work or running extra income-generating businesses on their own,” Mr Kawooya noted.
Moreover, additional earnings and savings boost these people’s resilience against financial shocks resulting from, say, unexpected therapeutic expenses, delayed wage payments or a seasonal crop failure.

But with internet connectivity challenges and the cost involved, a sizeable section of the population will continue to using the traditional method of payment. However, even in the murky waters, the decision to use virtual or traditional payment system is in consumers’ hands.

Mr Innocent Kawooya, the CEO of HiPipo.