Digitisation and power of mobile money
Globally, rapid digitisation has disrupted the financial industry through the advent of innovative services such as mobile banking apps or seamless transfer options. In low-and-middle-income countries, where over a billion people remain unbanked, mobile money has helped millions of unbanked people access financial services for the first time, tackling over-reliance on cash.
Expanding from 134 million accounts back in 2012 to 1.35 billion last year – a more than tenfold increase – mobile money has evolved from a niche money transfer offering to a mainstream service that is financially empowering hundreds of millions around the globe. Since the early adoption and rapid growth of mobile money in East Africa, mobile money has branched out from its epicentre in sub-Saharan Africa to the rest of the world. Through this period, the industry has continued to innovate and has seen significant growth.
A key feature of the industry’s progress in the past years has been mobile money’s rapid diversification beyond its key traditional use case: person-to-person transactions (for example transferring money to family and friends). Most notably, 2021 saw the mobile money industry become instrumental in helping small businesses operate more efficiently and improve the customer experience. Mobile money-enabled merchant payments almost doubled in value from 2020, reaching a global average of $5.5bn in transactions per month.
The urgency to digitalise all aspects of day-to-day life at the start of the pandemic catalysed the number of businesses accepting and receiving mobile money payments, thanks to efforts from mobile money providers and regulators. Since then, thousands of businesses, both physical and online, have started using mobile money to continuously drive prosperity and customer growth. Despite this growth, there is substantial room for growth in mobile money-enabled online payments as many merchant payments in Africa remain offline.
In 2021, new partnerships emerged between mobile money providers and payment technology companies to provide ‘fintech-as-a-service’. Iterations like this are already being made to enable more mobile money users to pay for online purchases. But there is still work to be done to help businesses embrace digital payments.
Looking back on the last year, the mobile money industry has seen significant growth, experienced vast diversification, and empowered financial inclusion. Behind the numbers and milestones within the mobile money industry are hundreds of millions of people participating in a more inclusive digital economy. But even so, more can be done to unlock the benefits of mobile money even further, driving not just financial access, but financial health.
Making mobile money widely available and more beneficial to all, particularly for the underserved, requires a holistic approach: appropriate corporate strategies and investments and conducive policy and regulatory changes, with a focus on all barriers along the customer journey.
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