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GSMA: State of the Industry Report on Mobile Money

Mobile money is now considered a mainstream financial service in many countries During the COVID-19 pandemic, mobile money enabled millions of people in low- and middle income countries (LMICs) to access digital financial services (DFS) for their daily needs.

As the impact of the pandemic eased, mobile money services grew faster in 2022 than during pre-COVID times. The habit of using digital payments, enforced by the pandemic, has stuck for many.

In many countries, growth in mobile money (MM) activity is now outpacing new registrations – a sign that the industry is maturing beyond a handful of markets – this is according to the latest annual State of the Industry Report on Mobile Money by the GSMA.

The pandemic itself led to a significant global expansion of mobile money services and accounts. Data from the annual GSMA Global Adoption Survey suggests that registered accounts and 30-day active accounts grew faster than forecast in 2019.

The pandemic was partly responsible for an additional 400 million registered accounts between 2019 and 2022.

This is at least 30% higher than forecast in 2019. Pandemic lockdowns and restrictions on movement drove up the use of digital payments, including mobile money, globally.

The State of the Industry Report 2023 looks at the growth of mobile money in a post-pandemic world. The report highlights what this has meant for mobile money providers (MMPs), agent networks and the millions of new and existing customers that embraced mobile money in 2022.

Adoption and active usage continue to rise

Registered accounts grew by 13% year on year, from 1.4 billion in 2021 to 1.6 billion in 2022. This can be attributed, in part, to regulatory changes in Sub-Saharan Africa, particularly in Nigeria and Ethiopia where mobile money adoption rose rapidly.

Accounts active on a 30-day basis also grew at the same rate year on year, with Sub-Saharan Africa driving the bulk of this increase. More customers are using MM accounts more frequently across all use cases.

Digital transactions are increasing as the use of cash slows down

Transaction values grew by 22% between 2021 and 2022, from $1 trillion to around $1.26 trillion. However, the share of cash-based transactions in the overall transaction mix declined, with cash-in and cash-out transactions dropping nearly two percentage points. This is due to a significant rise in digital transactions, particularly interoperable bank transfers and bill payments.

Global daily transaction values are exceeding predictions

In 2020, global daily transaction values exceeded $2 billion. The State of the Industry Report 2021 (covering data from 2020) suggested this could reach $3 billion a day by the end of 2022. This figure has been surpassed, with $3.45 billion transacted daily via mobile money in 2022.

Growing agent networks continue to drive industry expansion

The number of MM agents grew from 12 million in 2021 to around 17 million in 2022 – a staggering 41% year-on-year increase. Much of this growth was in Nigeria where a liberalised regulatory regime has led to an increase in MMPs. Agents are an important part of any mobile network service and were responsible for two-thirds of all cash-in transactions in 2022.

Women in low-and middle-income countries are 28% less likely than men to own a mobile money account

More women have a mobile money account than ever before and are using it at a similar rate as men on a 30-day basis. However, there is still a gender gap in account ownership that has recently widened in countries such as Nigeria and Pakistan.

One of the main barriers to closing the gender gap is mobile phone ownership: increasing mobile phone ownership can improve mobile money adoption rates among women. Other steps to close the mobile money gender gap include increasing women’s digital skills and awareness of the benefits of mobile money, and tackling social norms and other barriers that are preventing women from using it.

Bill payments grew faster than all other use cases

In 2022, bill payments rose by 36% year on year, becoming the third most common transaction after person-to-person (P2P) transfers and combined cash-in/cash-out (CICO) transactions. Around 97% of MMPs surveyed in 2022 offer bill payments.

Some of this growth was driven by greater integration between MMPs and companies, particularly energy suppliers. The ongoing increase in energy prices in many countries has led to several energy companies becoming the largest recipients of mobile money-based bill payments.

International remittances continue to benefit from pandemic-induced growth

In 2022, mobile money-enabled international remittances grew by 28% year on year. During the pandemic, many diasporas sent more funds via mobile money to friends and family than ever before. As a result, international remittances grew significantly in both 2020 and 2021, as many senders favoured MM for its efficiency, speed, safety and cost effectiveness.

This trend continued in 2022, albeit at a slower rate. Mobile money is leading the pathway to reaching the UN SDG 10c. target of 3% for remittance transaction costs. The World Bank’s Remittances Price Worldwide publication reported that the global average cost of sending $200 via MM was 3.73%, nearly half of the global average.

Fast-growing interoperable transactions are driving the industry too

MMPs are increasingly connected to local banks – 18 on average. Bank-to-mobile interoperable transactions were among the fastest growing use cases in 2022, increasing 36% year on year, while mobile-to-bank transactions rose by 47%.

Mobile money remains a key savings channel

In 2022, around 60% of MMPs offered users a savings account. Half of these providers did not offer a savings product in 2021. The World Bank Global Findex 2021 found that 15% of adults in Sub-Saharan Africa, or 39% of all MM account owners in the region, saved using a mobile money account.

The industry is edging back towards revenue diversification

MMPs remain reliant on customer fees, which contributed 79% of reported revenue as of June 2022. This is an improvement on the 87% share reported in 2020, which was influenced by many transactions being zero rated. MMPs have room for revenue growth from business and government fees, which made up 33% of their

revenue in 2019.

Regulation has been influenced by challenges such as taxation and fraud

Regulation has focused on ensuring payment systems remain safe and efficient while also encouraging innovation. However, the mobile money industry is facing several regulatory challenges. Some countries have introduced taxes on mobile money transactions and fees that do not align with their financial inclusion objectives. Fraud also remains an industrywide issue, which many regulators are aiming to overcome through improved consumer awareness and capacity building.

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