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DIGITAL CASH

Half of the world’s mobile money services are in Africa

A nurse refills her mobile money account with an agent in Dakar, Senegal.
REUTERS/NELLIE PEYTON
In 2020, the continent accounted for the majority of growth in the industry.
  • Carlos Mureithi
By Carlos Mureithi

East Africa correspondent

Published Last updated on

Africa continues to be the global leader in mobile money services, a position boosted by the Covid-19 pandemic, which forced people to turn to digital services as a safer transaction method than using cash.

The continent, particularly the sub-Saharan Africa region, has been at the forefront of mobile money for years. Last year it accounted for much of the industry’s growth in the number of users, according to the latest report by GSMA, an organization representing the interests of mobile network operators worldwide.

GSMA defines a mobile money service as one that is accessible to people who do not have formal bank accounts. As such, it does not include in its accounting any mobile banking or payment services that are linked to traditional bank accounts or credit cards.

More than 300 mobile money providers

As of 2020, there were 310 live mobile money services. Out of these, 55.2% were in Africa. Mobile money is now available in most markets where access to financial services is low, the report says.

In 2020, the number of registered mobile money accounts grew by 12.7% globally to 1.2 billion. Sub-Saharan Africa added the most users last year—43% of all new accounts.

The global increase was in part a result of changes in consumer behavior, with more people open to digital transactions. But it was due to regulators implementing more flexible “Know Your Customer” processes to verify users’ identity and suitability for a product, and relaxing registration requirements to make it easier to open an account, the report says. The fastest growth was also in regions where governments provided significant pandemic relief to citizens, it adds.

Global transaction value increased by 22% to $767 billion, more than doubling in value since 2017, with 64.5% in Africa.

Many African firms made moves last year to expand into mobile money services. For example, Kenyan and South African telecom companies Safaricom and Vodacom acquired the M-Pesa brand and its product development and support services from the UK’s Vodafone, offering opportunities to expand M-Pesa into new African markets. Airtel Africa entered a partnership with MoneyGram, enabling Airtel Money customers to receive MoneyGram transfers directly into their mobile wallets from more than 200 countries across the world.

While the Covid-19 pandemic may have been a catalyst for digital transactions on mobile platforms in 2020, mobile money providers have not necessarily reaped the commercial benefits of this development, the report says. Consumer spending, the major driver of mobile money revenues, has reduced, and many mobile money services offered fee waivers to reduce handling of cash during the pandemic. M-Pesa’s half-year revenue for April to September 2020 dropped by 14.5%, for instance.

Still, the report states that “having proven itself resilient in the face of sudden and unpredictable change, the industry will emerge from the pandemic more active, integrated, and collaborative.”

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