Global mobile money adoption tops $1-trillion mark

29th April 2022 By: Natasha Odendaal - Creamer Media Senior Deputy Editor

Global mobile money adoption and use continued on a strong growth path in 2021, passing the milestone of processing a record $1-trillion a year as accounts, value and transaction volumes all soared.

The tenth yearly ‘State of the Industry Report on Mobile Money’ shows a significant increase in the number of registered accounts, up 18% since 2020 to reach 1.35-billion globally in 2021, while the volume of person-to-person transactions increased to more than 1.5-million every hour.

Contributing to the record $1-trillion in transaction value, the mobile money industry globally had 316 live services, 346-million active accounts and $53.9-billion in transaction volume.

Across Africa, there were 173 live services, 621-million registered accounts, 184-million active accounts, $36.7-billion in transaction volume and $701.4- billion in transaction value in 2021, with West and East Africa leading the way.

East Africa accounted for 59 live services, 296-million registered accounts, 102-million active accounts, $24-billion in transaction volume and $403.4- billion in transaction value, while in West Africa there were 69 live services, 237- million registered accounts, 58- million active accounts, $9.3- billion in transaction volume and $239.3-billion in transaction value.

Central Africa accounted for 19 live services, 60-million registered accounts, 19-million active accounts, $2.9-billion in transaction volume and $50.1-billion in transaction value.

Southern Africa contributed 14 live services, 13-million registered accounts, four-million active accounts, $335-million in transaction volume and $4.9-billion in transaction value and North Africa contributed 12 live services, 15-million registered accounts, one-million active accounts, $77-million in transaction volume and $3.7-billion in transaction value.

During the year, mobile money diversified its value proposition beyond person-to- person transfers and cash-in/cash-out transactions and is now playing an important role in the daily lives of people and businesses, especially in low- and middle-income countries (LMICs).

“2021 was the year mobile money started to diversify to business-to-business 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,” says GSMA mobile for development head Max Cuvellier.

The report reveals the growth of ecosystem transactions such as merchant payments, international remittances, bill payments and bulk disbursements, and interoperable transactions.

Merchant payments emerged as one of the most significant drivers of growth, nearly doubling year-on-year to reach an average of $5.5-billion in transactions a month.

“Providers are demonstrating that they can attract businesses to their platform with better incentives, such as efficient remote onboarding processes. “For example, since Safaricom’s M-Pesa started allowing companies to register for an account online in Kenya, more than 18% of new merchants are self-onboarding.”

Further, 44% of providers responding to the GSMA Global Adoption Survey now offer credit, savings or insurance products, creating opportunities for underserved individuals to invest in their livelihoods and futures.

Mobile money, which enables access to humanitarian aid, utilities and agricultural solutions, is also 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, as the number of people needing humanitarian assistance is predicted to soar to 274-million.

The United Nations Refugee Agency sent $700-million in cash and value assistance (CVA) to 8.5-million recipients in 100 countries in 2020, and has set up digital payment programmes in 47 countries, 15 of which use mobile money.

In many humanitarian settings, the digitalisation of CVA through mobile money has the potential to promote agency and dignity, and foster financial inclusion.

Mobile money has also been a driving force for financial inclusion for women; however, with the gender gap in mobile money accounting for ownership ranging from 7% in Kenya to 71% in Pakistan, there remain some barriers to vulnerable people benefiting from mobile money.

Women across LMICs are 7% less likely than men to own a mobile phone, which is a prerequisite to using mobile money, and overall 143-million fewer women own a mobile than men.

While some progress has been made, more must be done to address the mobile money gender gap across LMICs.

“Concerted action is required from policymakers, the private sector, donors and other stakeholders to learn from success stories, address the issue and ensure that existing gender inequalities are not further entrenched, especially in light of the Covid-19 pandemic,” says the report.

Additional barriers to mobile money access include a lack of awareness of mobile money and a deficit in perceived relevance, knowledge and skills.