Fast rise in mobile money accounts shows demand continues among unbanked people

By:
Published on:

People without bank accounts are showing an increasing appetite for using mobile money services, according to the latest industry figures, as global operators expand their services


More about mobile money in Global Telecoms Business
  
IDT set to develop market for global top-up, says VP ... 14 Apr 2014
Mobile phone companies challenge card firms in battle to win ... 15 Jan 2014
Mobile money's changing landscape needs operators to be ... 30 Dec 2013
Orange Money expands to petrol stations 24 Jul 2013
Vodafone introduces M-Pesa to India 17 Apr 2013
30m people using mobile money, claims GSMA 27 Feb 2013
Vodafone expands mobile money service 23 Oct 2012




               
Etisalat group CEO Ahmad Abdulkarim Julfar with MasterCard
executive Ann Cairns, president of international markets, and
Etisalat’s chief digital services officer Khalifa Al Shamsi



The number of active mobile money users around the world has continued to grow, according to the latest research.

At the end of June 2013 — the latest date for which figures are available — there were 61 million active accounts, compared with 37 million in June 2012. But at the same time, the number of registered mobile money accounts nearly tripled from 71 million in June 2011 to 203 million in June 2013.

The information comes from the GSM Association’s annual report from its Mobile Money for the Unbanked programme.

The third annual Mobile Financial Services State of the Industry Report provides a quantitative assessment of the state of mobile financial services, including mobile money, mobile insurance, mobile credit and savings.

The report draws on the results of the annual MMU global adoption survey, as well as on data from the online MMU deployment tracker and qualitative insights on the performance of mobile financial services from the MMU programme’s engagement with the industry over the last year.

There is clearly still a long way to go. There may have been 219 services in 84 countries at the end of 2013, compared to 179 services in 75 countries at the end of 2012, but 61 million mobile money accounts means that only about one in 100 mobile phone accounts across the world is associated with a mobile money service.


Enormous impact

The GSMA’s chief regulatory officer, Tom Phillips, gave a positive reaction to the statistics. “This annual report underscores the enormous impact that mobile money is having in emerging markets, by providing access to increasing numbers of products and services and helping millions of people to manage their daily lives and improve their livelihoods,” he said.

“Each year our review reveals greater insights on the wide range of uses of mobile money and on how operators are working collaboratively in developing mobile money services to meet growing customer demand.”

According to the GSMA, positive regulatory reforms that are enabling mobile money services are contributing to the growth of the industry in terms of number of deployments. The majority of services remain in sub-Saharan Africa, with 52% of all live mobile money deployments located in the region.

However, mobile money is also expanding outside of the region, with, for example, 19 mobile money launches planned in Latin America.

The GSMA report highlights that an increasing number of providers are overcoming operational challenges to create solid distribution networks and a large base of active customers. The report shows that 13 services each have more than a million active mobile money accounts and those services that have created solid foundations are moving forward with new products such as bulk payments and merchant payments.

The increased number of mobile money users and access points illustrates the important role of mobile financial services in driving financial inclusion in developing countries, says the GSMA.

At the end of 2013, nine markets, Cameroon, the Democratic Republic of Congo, Gabon, Kenya, Madagascar, Tanzania, Uganda, Zambia and Zimbabwe, already had more mobile money accounts than bank accounts, compared to just four markets a year before.


Mobile insurance

In these markets, the mobile money industry has made financial services accessible to more people than the traditional banking industry. The development of other mobile financial services, including 123 mobile insurance, mobile credit and savings services, 27 of which were launched in 2013, will allow service providers to deepen financial inclusion by offering financial services beyond money transfer and payments, said the GSMA.

As mobile money becomes a mainstream product for a growing number of operators, competition is also increasing. At the end of 2013, 52 markets had two or more mobile money services compared to 40 in 2012.

In June 2013, transactions involving external companies using mobile money as a platform to receive and make payments drove the growth in mobile money globally, representing 29% of the total value of transactions.

These transactions are also growing much faster than airtime top-ups and on-net transfers. In June 2013, 53,000 merchants were accepting payments via mobile money and 16,000 organisations use mobile money as a payment platform for accepting bill payments or making salary payments.

Phillips added: “As the mobile money industry grows, we are seeing how these services are benefiting the lives of millions of citizens in developing countries all around the world. We will continue to track these tremendous developments and work with mobile operators and the broader ecosystem to expand the scope of services available and to extend services to more of the world’s population.”

Meanwhile the mobile money business has received significant boosts through a pair of significant agreements between major global operators and international financial companies. 



             
Michael Joseph, Vodafone’s director of M-Pesa: There is huge
demand for sending funds back to family and friends in your
home market


MoneyGram deal

Vodafone announced a global agreement with MoneyGram, a global money transfer and global payment services company, that will allow consumers to transfer funds directly from around 200 countries to the millions of users of M-Pesa.

Vodafone’s Kenyan partner Safaricom pioneered mobile money services under the M-Pesa brand in 2007 and it is now regarded as the most successful mobile phone based financial service in the developing world.

This link with MoneyGram will be launched in key markets during the second quarter of 2014, with additional roll-out planned throughout the remainder of the year.

The agreement will allow consumers who visit MoneyGram’s 334,000 agents across the globe to send funds directly to M-Pesa accounts. MoneyGram customers can also transfer money to an M-Pesa user through the company’s website or via a mobile app, available on iPhone, Android and Windows 8 phones.

M-Pesa — which allows customers to pay bills and withdraw, transfer and deposit money easily — has expanded from Safaricom in Kenya to a further eight countries, the Democratic Republic of Congo, Egypt, Fiji, India, Lesotho, Mozambique, South Africa and Tanzania. Additional markets are due to launch M-Pesa during 2014, says Vodafone.

M-Pesa had nearly 16 million active customers at the end of September 2013 and approximately 165,000 authorised agents worldwide.

A customer can buy airtime and pay for bills, such as electricity and water as well as groceries. Many other businesses are using the service to allow their customers to pay them easily and safely. Additionally in Kenya, Safaricom and Vodafone recently launched a savings and loans product in partnership with the Commercial Bank of Africa.

M-Pesa’s active customers make in excess of €900 million worth of transactions per month.


Huge demand

Michael Joseph, Vodafone’s director of M-Pesa and the CEO of Safaricom when M-Pesa was launched, said: “There is huge demand for sending funds back to family and friends in your home market and an estimated $90 billion a year is transferred to M-Pesa markets from around the globe. Our partnership with MoneyGram provides the most extensive global network and greatest number of access points for consumers wishing to transfer funds to M-Pesa users.”

The World Bank estimates that more than half of all inhabitants in the countries in which M-Pesa is available do not have access to a traditional bank account.

With most of these inhabitants belonging to low-income rural areas and becoming increasingly reliant on cross-border transfers, mobile money provides a simple and low-cost method for geographically dispersed families to bank and transfer funds.

Alex Hoffmann, senior vice president of global product management and emerging channels at MoneyGram, said: “This agreement furthers our goal of joining with fast and reliable mobile wallets so consumers may send money for life’s essentials anywhere and any way they want, simply and conveniently.”

Meanwhile Etisalat has announced that it is working with MasterCard to develop mobile payment technologies.

Khalifa Al Shamsi, chief digital services officer at Etisalat, said at Mobile World Congress in Barcelona in February that MasterCard and Etisalat plan to replicate the success of their existing mobile payment solutions including recent commercial launches of services in Egypt and Nigeria.

“Both MasterCard and Etisalat recognize the need for innovative new products that meet the unique needs of consumers,” said Aaron Oliver, MasterCard’s head of emerging payments for the Middle East and Africa.

“As mobile penetration rates across the region continue to grow, we will continue to tap into the expertise of both companies to find more ways of converging payments with mobile. Our work so far with Etisalat is just a scratch on the surface.”


Point of sale

Services already launched include a mobile point of sale service which transforms merchants’ smart devices such as phones or tablets into industrial-grade point of sales terminals, enabling them to accept debit, credit and pre-paid cards and mobile money accounts payments.

“Technology and innovation are key drivers of financial inclusion,” said Oliver. “We believe that everyone should have access to financial services and we will continue to work alongside our partners to ensure that financial inclusion becomes a reality for everyone across the region.”


More about mobile money in Global Telecoms Business
  
IDT set to develop market for global top-up, says VP ... 14 Apr 2014
Mobile phone companies challenge card firms in battle to win ... 15 Jan 2014
Mobile money's changing landscape needs operators to be ... 30 Dec 2013
Orange Money expands to petrol stations 24 Jul 2013
Vodafone introduces M-Pesa to India 17 Apr 2013
30m people using mobile money, claims GSMA 27 Feb 2013
Vodafone expands mobile money service 23 Oct 2012