The days when you had to spend USh10,000 on bus fare just to deliver USh20,000 to a relative in the village or join a long queues in banking halls to pay bills are soon coming an end.

The advent of mobile money, a platform which allows people to use their phones to transfer money, conduct banking services and pay for goods and services, has started to gather an unexpected pace.

The massive uptake of the mobile commerce platform as opposed to traditional banks can be explained by the rapid growth of mobile phone penetration.

With a population of about 32 million people, Uganda has over 10 million mobile phone subscribers and only about three million bank account holders.

The platform took advantage of the extensive reach of mobile phones to improve financial access and bring a good number of people into the formal banking system.

The service rides on Zain's Zap, Uganda telecom's M-sente and MTN's Mobile money.

Mr Brandon Semanda, the Zain Uganda marketing manager says the firm has about 140,000 active clients using Zap and over 1.4 million customers with enabled sim cards and Uganda Telecom's M-sente has a subscription of about 29, 510 as of August 8, 2010.

The convenient, flexible, low cost and instantaneous nature of the platform has led to its swift popularity among Uganda's underserved and unbanked population.

Using the mobile phone as a bank account reduces the need to carry cash and enables users to purchase airtime, pay bills including water, electricity, cable TV services, school fees, merchandise.

Zap moves an estimated USh2 billion monthly and the average amount sent per transaction is between USh50,000 and USh500,000.

M-sente moves an average of USh300 million per month, says Mr Mark Kaheru, Uganda telecom's relations manager.

An average of USh43 million was withdrawn per week and airtime worth USh2.5 million was purchased.

The platform has been taken up by many people, especially the unbanked, as a substitute of a savings account, which enables them to deal with unexpected expenses such as medical treatment.

Much cheaper

Thus, sending money using mobile money is much cheaper and faster compared to the slow and costly transfers via banks and traditional money sending agents.

Players say the novel product that provides the most comprehensive and accessible package of mobile commerce is slowly changing Uganda's socio - economic landscape.

The platform has made business transaction easier with more money flowing in from upcountry districts to Kampala to purchase goods and agriculture equipments thereby increasing trade.

"People no longer need to board buses to come to Kampala to trade, they simply send money using phones to someone they trust here who buys and sends the goods back," Mr Kaheru says.

The low rate charges for transfers saves money that would have been used on transport and huge transaction costs while saving time that would have been spent on journeys or long queues.

Zap subscribers pay between USh250 and USh5,000 to transfer upto USh1 million.

MTN's registered users pay USh800 to send any amount of money irrespective of the amount and user location and between USh700 and USh9, 000 to receive cash.

"The impact of mobile money services may be minimal now but in a few years, a huge impact will be seen," Mr Semanda said.

Through the service, Zain has created jobs for over 4,500 Zap agents across the country.

Users are also able to keep track and manage their finances through their handsets; for instance checking account balances, changing passwords and getting bank information and reports.

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