Mobile money industry processed $1 trillion transaction last year

•Report says vulnerable are yet to benefit from system
Mobile Money operators in Nigeria and other parts of the globe processed $1 trillion worth of transactions last year.

The Global System for Mobile telecommunications Association (GSMA) revealed this in its 10th yearly ‘State of the Industry Report on Mobile Money’.

It reported that the industry enjoyed a substantial rise in the number of registered accounts, up by 18 per cent since 2020, reaching 1.35 billion globally. It added that the volume of person-to-person (P2P) transactions was up to more than 1.5 million every hour.

The report revealed that one of the most significant drivers of growth was merchant payments, which almost doubled year on year. It also highlighted how mobile money continues to act as a core pillar of financial and economic inclusion, particularly for women.

According to GSMA, mobile money diversified its value proposition beyond P2P transfers and cash-in/cash-out transactions in 2021. It said it is now playing an important role in the daily lives of people and businesses, especially in low and middle-income countries (LMICs).

The global telecoms body noted that the growth of segments such as merchant payments, international remittances, bill payments and bulk disbursements and interoperable transactions, account for a more significant share of the global mobile money transaction mix.

It stressed that merchant payments were instrumental to the growth of the mobile money industry in 2021. According to it, the value of merchant payments almost doubled, reaching an average of $5.5 billion in transactions per month, adding that providers are demonstrating that they can attract businesses to their platform with better incentives, such as efficient remote onboarding processes.

For example, GSMA observed that since Safaricom’s M-PESA began allowing companies to register for an account online in Kenya, more than 18 per cent of new merchants are self-onboarding.

Head of Mobile for Development, GSMA, Max Cuvellier, said 2021 was the year mobile money started to diversify to B2B services.

He said 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.

The telecoms body said mobile money has also been a driving force for financial inclusion for the world’s most vulnerable, particularly women. It revealed that mobile money is empowering women to take more control over their finances and purchase goods that they urgently need.

It added that 44 per cent 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.

With the gender gap in mobile money account ownership ranging from seven per cent in Kenya to 71 per cent in Pakistan, “there remain some barriers to vulnerable people benefitting from mobile money. Owning a mobile phone is an obvious prerequisite to using mobile money, and women across LMIC’s are seven per cent less likely than men to own a mobile phone. Overall, 143 million fewer women own a mobile phone than men. Additional barriers to mobile money access include a lack of awareness of mobile money and a deficit in perceived relevance, knowledge and skills.”

While some progress has been made, the report makes clear that 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.

FURTHER, as highlighted in the report, in 2022, the number of people needing humanitarian assistance is predicted to soar to 274 million. 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.

“The UN Refugee Agency sent $700 million in cash and value assistance (CVA) to 8.5 million recipients in 100 countries in 2020. They have set up digital payment programmes in 47 countries, 15 of which use mobile money. In many humanitarian settings, the digitisation of CVA via mobile money has the potential to promote agency and dignity and foster financial inclusion.

Mobile money also helps to enable access to basic utility services and agricultural solutions in LMICs. And to ensure this work continues, the mobile industry and humanitarian sector must keep working together to advance inclusive digital and financial inclusion even further for those who need it most,” GSMA noted.