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GSMA: State of the Industry Report on Mobile Money

Now processing over $1.3 billion a day, the mobile money industry added a record 143 million registered customers in 2018 – according to the GSMA’s annual State of the Industry Report on Mobile Money.

Providers are attracting new investments and forming strategic partnerships, leveraging data and innovative financial technologies, and developing robust and interoperable payments systems to diversify their revenue, product offerings and customer base.

In 2018, following a decade of incredible growth, the mobile money industry is still getting the fundamentals right. Mobile money accounts continue to provide a gateway to life-enhancing services, such as healthcare, education, financial services, employment and social protections, which are reaching customers who have traditionally been underserved by the financial system.

mobile money customersMany industry players have reached scale, and account registrations, activity rates and transaction values continue to grow steadily. While cash-in and cash-out transactions still represented the majority of mobile money flows in 2018, digital transactions grew at twice the rate, driven largely by bill payments and bulk disbursements.

Successful providers are now looking to strengthen their value proposition with a full suite of use cases that serve diverse customer needs. This shift towards a ‘payments as a platform’ approach is at the heart of the industry’s new direction.

This year’s State of the Industry Report looks at how providers are navigating this dynamic and shifting ecosystem, which was shaped by four key trends in 2018:

An enhanced customer experience

2018 saw a dramatic increase in smartphone adoption in emerging markets, unlocking access to a broader customer base and allowing providers to offer a wider range of financial products and services through user-friendly apps. Interoperability also continued to be a strategic priority for the industry, not only to increase the utility of mobile money for users, but also to allow increasingly important use cases to scale up faster. The main drivers of digital growth in 2018 were bulk disbursements and bill payments — a signal that mobile money providers are becoming strong partners for enterprises.

Diversification of the financial services landscape

While large MNO groups still dominate Africa’s mobile money ecosystem, in Asia, fintechs and tech giants have entered the payments space and developed a range of customer-centric use cases, from transportation to food, medical and financial services, and amassed a vast number of partners, including financial institutions. Mobile money providers in both Asia and Latin America, including fintech players, are driving growth in the mobile payment ecosystem, and expanding from e-commerce to offer financial services such as credit.

Increasingly complex regulation

As the number of players in the digital financial services ecosystem grows exponentially, regulation is becoming increasingly complex. Five main themes dominated the mobile money regulatory landscape in 2018: taxation, KYC requirements, cross-border remittances, national financial inclusion strategies and data protection.

These developments call for a more nuanced evaluation of regulatory frameworks and collaboration between providers and regulators to achieve the mutual aim of expanding mobile money services.

Expansion of the mobile money value proposition

In our 2018 Global Adoption Survey, close to 80% of providers reported that most of their revenues are driven by customer fees. Many providers are now seeking to strengthen their value proposition with a ‘payments as a platform’ model. This connects consumers and businesses with a range of third-party services to meet their evolving needs, from enterprise solutions for micro-, small- and medium-sized enterprises (MSMEs) to e-commerce, credit, savings and insurance. It was not only these trends that captured our attention in 2018.

Other compelling developments include reforms in Africa’s three most populated countries, Nigeria, Ethiopia and Egypt, which we expect to spark a wave of adoption which could lead to over 110 million new mobile money accounts in the next five years.

Mobile money continues to play a vital role in financial inclusion

Globally, around 1.7 billion people still lack access to safe, reliable and convenient financial services.1 However, 31 emerging markets have seen an impressive increase in financial inclusion rates, which can be attributed to simultaneous growth in active mobile money use.

Although much work remains to be done in closing the mobile money gender gap, there is evidence from the 2017 Global Findex that the mobile money gender gap has narrowed in 17 countries in Sub-Saharan Africa and in one country in Latin America (Bolivia). Our Global Adoption Survey data revealed a strong positive correlation between the percentage of female agents in a provider’s network and female customers.

In this report, it takes a closer look at these trends and unfolding industry stories. The full findings of this year’s State of the Industry Report on Mobile Money are based on the analysis of data collected through the GSMA’s Annual Global Adoption Survey.

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