By Vince Kadar, CEO, Telepin
Each year, the GMSA’s State of the Industry Report on Mobile Money provides mobile operators and their partners and regulators with an important perspective on how far we’ve come—and what new challenges we face—in this fast-moving industry.
The 2016 report chronicled a decade of progress since the launch of M-Pesa in Kenya, and counted 500 million registered mobile money accounts worldwide. The 2017 report updated that figure to 690 million and showed us the impact of improved bank-to-mobile interoperability. The 2018 report, released in February this year, adds to this evolving perspective with new numbers, innovations, and perspectives.
Here at Telepin, where we’ve been adapting to the shifting needs of mobile money users for over 12 years, we’re paying close attention to three of the GSMA’s observations in particular. These factors are the key to planning the way forward for mobile financial services and the people who depend on them.
1. Mobile money accounts are growing quickly, but not equally.
Women in low- and middle-income countries are 33% less likely than men to use mobile money.
While the report acknowledges that more women are accessing mobile money solutions than in previous years, it reveals that positive gains in this direction are marginal and much more work is needed to see lasting, widespread impact on this vulnerable population.
The GSMA’s complementary Mobile Gender Gap Report 2018 cites several reasons for this gender gap. Affordability is a shared barrier between men and women; those who don’t own a mobile phone point to this cause equally, regardless of gender. But there are many other factors that disproportionately affect women, including safety and security concerns. The report emphasizes that local context is key to understanding—and addressing—these barriers, which vary significantly between regions and between countries within regions.
2. People are using mobile money in new ways.
Digital transactions grew at twice the rate of cash-in/cash-out transactions.
The original promise of mobile money was relatively simple, though critical: send and receive money. These basic transactions were game-changing for mobile users at the time of their emergence, and they continue to represent the majority of use cases in 2018.
Now customers are asking for more sophisticated transaction types (like bill payments and bulk disbursements). Mobile operators are responding to this shift in market demand by developing a “payments as a platform” business model, connecting consumers with businesses to support a wider variety of use cases. This trend is sure to shape the industry’s direction over the coming months and years.
3. It’s getting easier to transfer money between operators.
In 2013, person-to-person transactions between mobile money deployments was possible in just one market. In 2018, that number had risen to nineteen.
The report tells us that account-to-account (A2A) interoperability scaled in 2018, making mobile money a more user-friendly and flexible option for customers.
Together with a rise in digital transactions discussed above, this trend signals an overall improvement in customer experience and a diversification of available financial products in the mobile money ecosystem. As a result, the volume of mobile money flowing in and out of that ecosystem is more or less balanced; just a few years ago, it was heavily weighted to money flowing in.
For a closer look at these and other significant trends that will shape the future of mobile money around the world, view the full State of the Industry Report on Mobile Money (2018).
The views and opinions in this piece reflect those of Telepin and not necessarily those of GSMA.