How Bitcoin Differs from Mobile Money
Bitcoin is an electronic currency that serves as a payment method and a store of value. It enables users to transfer and receive money across international borders electronically. Unlike fiat money, Bitcoin’s existence and usage occur in the digital space. On the other hand, mobile money refers to a wide range of electronic payment methods conducted through mobile phones.
Similar to Bitcoin, mobile money platforms offer various value-added services, including paying for goods and services virtually. However, Bitcoin and mobile money have profound disparities. Here’s how Bitcoin differs from mobile money.
Applications
While Bitcoin and mobile money exhibit some similarities, they serve unique applications. Bitcoin is a currency accepted as payment for goods and services by merchants worldwide. Businesses and individuals can also use Bitcoin to trade and invest on stock markets and crypto exchange platforms such as Ekrona .
Unlike Bitcoin, mobile money is a service that facilitates electronic financial transactions in fiat currencies. Mobile money users must have local currencies to transact, but Bitcoin does not require users to exchange their funds into fiat currencies. They only send the stipulated amount of Bitcoin tokens worth the needed goods and services.
Bitcoin offers its users the option of creating an online or offline wallet while mobile money does not have such provisions. The limited storage options in mobile money services make customers more vulnerable to theft and other cyber threats.
Mobile money transactions occur through centralized systems, allowing users to reverse and cancel payments at their convenience. However, Bitcoin transactions are decentralized and irreversible. Bitcoin’s blockchain compiles all transactions on an immutable digitized ledger, accessible to all users.
Regulations
Several mobile money service providers are financial institutions such as banks, insurance companies, and money processors. Therefore, all the transactions are subject to government regulations and institutional influences. The service providers regulate their customers’ transaction volumes and could even decline payments indefinitely.
On the other hand, Bitcoin is a decentralized currency not subjected to government and regulatory influences. No central authority regulates Bitcoin transactions, enabling users to transact worldwide without external interference. That ensures greater convenience in sending and receiving payments across international borders.
Several governments and regulatory authorities stipulate that mobile money service providers must partner with third parties to complete cross-border transactions. That usually impacts substantial transaction costs and delays in processing large sums of money.
Bitcoin transactions happen on the blockchain without any third party. That offers users the autonomy to manage their wealth as they see fit. Besides, the absence of intermediaries also contributes to faster payment processing and low-cost transaction fees. It also protects against fraud and other common risks like data theft.
Mobile money users must disclose their identities to service providers to transact but, Bitcoin allows people to transact anonymously.
Transaction Costs
The transaction costs are the primary factors that most people consider when choosing Bitcoin and mobile money. Receiving funds through Bitcoin or mobile money services is free. Sending payments attract minimal fees but, the rates vary significantly.
Mobile money providers set standard rates for remittances based on government regulations, company policies, and volume of transactions. Sometimes, service providers can even increase the transaction fees indefinitely, inducing a substantial financial burden on customers.
Bitcoin has relatively lower transaction costs, mainly determined by the transaction volumes. Besides, Bitcoin payments do not involve intermediaries like mobile money remittances, impacting low-cost transaction fees. The low transaction costs make Bitcoin seem like a more efficient payment method than mobile money.
Bitcoin and mobile money are new inventions with several similarities but, they also possess many unique characteristics. The above article has discussed some critical disparities to help you make informed decisions.