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Africa continues to be world leader in mobile money services, pandemic surges transactions

Mobile money is one of the ways through which people conduct financial transactions through either a tablet or mobile device using a service provider without necessarily using the internet.

Africa is the leading continent and fastest growing market when it comes to mobile payments of this nature. The coronavirus pandemic further strengthened this mode of payments.

Kenya takes the lead in the mobile payment technology segment with “M-Pesa” which offers payment services from one mobile device to another since the past 13 years.




The valuation of transactions on mobile phones in Africa is said to have increased by a whopping 900% since the year 2011. This is only expected to grow as over two-thirds of Africa’s population would own a smartphone by the end of 2025.

PANDEMIC SURGE

By the end of the pandemic year it was found that there were a total of 310 live mobile money services, of this 55% were solely in Africa. 2020 also saw the rise in number of registered mobile money accounts which grew over 12.5% and touched 1.2 billion all over the world.

About 43% of all the new accounts created in 2020 were from sub-Saharan African regions and that the global mobile money transaction value increased by a record 22% and hit a whopping $767 billion and of this over 60% was contributed by Africa alone that is roughly over $450 billion.



The pandemic pushed several game changing decisions in this segment.

M-Pesa, Africa’s biggest and well renowned mobile wallet that offers SMS based mobile banking services was taken over by the Kenyan company Safaricom and South Africa’s Vodacom with intentions to expand and export M-Pesa across other Africa regions.

Even Airtel Africa, an Indian multinational telecommunication service provider entered into an agreement with an American money transfer corporation called Money Gram to provide instant access for mobile transfers to over 19 million people in Africa. Recently the service provider raised $200 million from investors for its mobile money operations in this region, taking its valuation to $2.65 billion.

“We are delighted to work with MoneyGram to provide millions of customers with fast, secure and convenient options to receive and send money as well as access their funds from a vast distribution of exclusive kiosks, agents and branches at their convenience. This partnership with Airtel will enable millions of consumers instant access to our global platform to receive money from over 200 countries and territories without having to even step outside,” said Raghunath Mandava, CEO of Airtel Africa.

Digital banking too has been picking up in this region. Velmie is a digital banking platform and a custom solutions provider. This platform has developed several fintech solutions that are specifically catering to the PAN African market. It has built a mobile bank for people to conduct transactions relating to international remittances, bill payments and peer to peer transfers (P2P) and has also powered Web interfaces and wallet applications for Android and IOS operating systems.

The future of mobile money is very promising in this region. Several researchers have also found out that mobile money has led to savings. Households with such accounts are 22% more likely to save money and on average household savings have reportedly increased by a minimum of 15%. The long term effect of mobile money has a positive impact on reducing the rate of poverty.