The mobile money industry is expected to reach $1 Trillion by 2021

The 2021 record for mobile money processing was $1 trillion, which saw an increase in adoption and use. GSMA‘s 10th annual ‘State of the Industry Report on Mobile Money’.

Since 2020, the number of registered accounts has increased by 18% to 1.35 billion worldwide. Meanwhile, the volume of person to person transactions reached more than 1.5million every hour. This report shows that merchant payments are one of the key drivers of growth. It almost doubled in value year-over-year and continues to be a pillar of economic and financial inclusion, especially for women.

There will be 316 mobile money deployments worldwide in 2022.

Significant growth in merchant payments

In 2021, mobile money expanded its value proposition beyond individual-to-person transfers. It plays an integral part in people’s daily lives and in businesses, particularly in low- and middle-income countries (LMICs). An increasing number of ecosystem transactions including merchant payments, international money transfers, bill payments, bulk payments and interoperable transaction are contributing to the global mobile money transaction mix. In 2021, merchant payments played a key role in the industry’s growth. The average merchant payment transaction value reached $5.5 billion each month, which is almost twice the amount of merchant payments. Providers are showing that they can attract businesses using better incentives such as remote onboarding and efficient processes. For example, since Safaricom’s M-PESA began allowing companies to register for an account online in Kenya, more than 18% of new merchants are self-onboarding.

“2021 was the year mobile money started to diversify to B2B services. Beyond traditional person-to-person transactions, such as transferring money to family or friends, the industry is now central in helping small businesses operate more efficiently, and serve their customers better” said Max Cuvellier, Head of Mobile for Development, GSMA.

Women’s financial inclusion should be increased

Mobile money has also been a driving force for financial inclusion for the world’s most vulnerable, particularly women. It’s empowering women to take more control over their finances and purchase goods that they urgently need. 44% of the GSMA Global Adoption Survey respondents now offer credit, savings, or insurance products. This creates opportunities for people who are not well served to invest in their lives and futures.

With the gender gap in mobile money account ownership raging from 7% in Kenya to 71% in Pakistan – there remain some barriers to vulnerable people benefitting from it.

Owning a mobile phone is an obvious prerequisite to using mobile money, and women across LMIC’s are 7% less likely than men to own a mobile phone. A total of 143 million women have a mobile phone, which is fewer than the number of men. Access to mobile money is also hindered by a lack in awareness and a deficiency of knowledge and skills. Although there have been some improvements, the report emphasizes the need to do more to reduce the mobile money gender gap in LMICs. To learn from the success stories of others, policymakers, donors, and all other stakeholders, concerted action is needed.

The report highlights that the 2022 number of people who will require humanitarian assistance is expected to rise to 274 millions. Mobile money is expected to play an increasingly important role in both donations – where it makes delivery systems more efficient and transparent for humanitarian actors and donors – and the receipt of aid. In 2020, the UN Refugee Agency distributed $700 million in cash-and-value assistance (CVA), to 8.5 million beneficiaries in 100 countries. They have created digital payment programs in 47 of the world’s countries. Of these, 15 use mobile money. Mobile money can be used to digitize CVA in humanitarian settings. This has the potential for financial inclusion, dignity, and agency. Mobile money can also be used to access basic utilities and agricultural solutions in LMICs. To ensure that this work continues, both the mobile sector and the humanitarian sector must continue to collaborate to promote inclusive digital and financial inclusion for those most in need.

Get latest news from African Startup ecosystem

Latest stories

You might also like...