The GSMA recently released its State of the Industry Mobile Money Report, looking at how the sector has grown in the past year. Mobile money has of course been one of the major success stories for the industry in emerging markets, and we’ve certainly found in the past that reports of its death have been greatly exaggerated.
Last year, the mobile money industry processed over $1.68 trillion in transactions, and with volumes growing at about 20% compared to values at 16%. Use is therefore clearly increasing, and growth is high, but the volume side is outpacing that of the value. There was also significant growth in the agent network, with 28 million registered mobile money agents – an increase of 20% over 2023. The bulk of this growth came from Sub-Saharan Africa, but there was also growth in South Asia and East Asia/Pacific.
Mobile money has a demonstrable impact on GDP, having contributed US$720 billion in GDP globally between 2013 and 2023, a 1.7% increase; again, Sub-Saharan Africa was a major beneficiary of this, with mobile money contributing upwards of 5-6% towards GDP depending on the country. Additionally, adjacent services are now a major element of the offering – nearly half of survey respondents said they offered digital credit, and around 34% of mobile money providers offer savings products now. Insurance is trailing behind at 28%, but it is increasing.
Ashely Olson Onyango, Head of Financial Inclusion and AgriTech at GSMA, notes that the report details the mobile money gender gap across several markets, with 8 of 12 focus countries still reporting a significant gender gap in mobile money account ownership. While in Sub-Saharan African, usage tend to be on par – Kenya and Tanzania have a very small discrepancy of around 1% – there are significantly larger gender gaps in markets such as Pakistan, Ethiopia and Egypt. These markets have overall lower penetration rates for mobile money – hovering near 60% – and so driving awareness and increasing adoption will likely help to narrow this gap, but there are other cultural factors in play.
Barriers to adoption
“The first is mobile ownership – if you don’t have a mobile phone, you can’t own a mobile money account”, says Olson Onyango. “Then it’s awareness… then it’s adoption, and then it’s usage. Each one of those, you can see in countries where there’s lower mobile ownership, then adoption is going to be lower as well. A lot of this is societal, cultural norms, but there’s a lot of other issues that are driving this. Women’s financial literacy, digital and financial literacy tend to be lower than men’s. They tend to perceive their relevance of mobile money to be less for them. There’s a lot of behavioural aspects around that lower adoption and those wider gender gaps.”
She notes that societal norms around women’s roles in financial decision-making are also likely to play a part, particularly in Muslim-majority countries such as Pakistan and Egypt. However, Ash Robinson, a Research Analyst at ABI Research, argues that the lower gender gap in Sub-Saharan Africa may simply be due to mobile banking being the sole option.
“Most people in this region did not use traditional banking beforehand, with cash being more prevalent that card payments. This has led to a similar payment environment to that of Southeast Asia with mobile payments skipping the usual escalation [cash to card to mobile payments]” and instead going straight from cash to mobile payments.
“This combined with a high smartphone install base has led to mobile payments being the preferred way to pay in the region”, notes Robinson.
Legitimising the sector
The growth of mobile money has been spurred by recognition of its legitimacy – major companies such as Visa and Mastercard partner with mobile money providers, lending recognition and trust as well as financing. Robinson notes that in addition to providing services with stability and innovation, strategic partnerships provide an important credibility factor that helps drive consumer use. “By Visa and MasterCard effectively saying we trust these platforms enough to invest and partner them, it signals to consumers and investors that this is a company they can trust.”
“In 2019, we saw MasterCard invest in Airtel money – that was a big moment, and since then we’ve seen a lot more” says Olson Onyango. “MasterCard also invests in Airtel money and MTN Momo, but then they have a lot of strategic partnerships with Safaricom, UPaisa and Jazz Cash in Pakistan. These partnerships are catalytic; the investment is one thing that allows growth innovation driving that mobile money business. The strategic partnerships also are also… bringing virtual and digital cards to consumers, building the relevant side of it and trying to expand what’s possible with a mobile money account.”
“Visa has driven strategic partnerships with Safaricom in Kenya and Telenor in Pakistan, and these have slowly been formalising over the last several years. In 2024 MasterCard announced four [partnerships], which was massive – every year before that, it was one or two. We keep seeing more of that as a way for them to diversify their user base, particularly in markets where physical cards don’t really have much of a penetration and adoption. This is a way for MasterCard or Visa to come in and build a user base through the mobile money providers.”
Securing the bag
Security is another area where this kind of co-operation has a huge impact – in a sense helping to legitimise mobile money services. Robinson reiterates that companies like Visa and Mastercard provide a solution with a sense of stability, citing the example of GCash in the Philippines, which saw $786 million in investments from MUFG and Ayala Cooperation each contributing $386 million. This investment helped steady GCash’s position, which had been tumultuous in 2023; several cases of fraud led to a fall in user numbers and a significant drop in stock price. Since the investment, GCash stock has steadied and is on the rise again.
“Security is obviously still a big concern” says Olson Onyango. “We saw this when mobile money providers started to open up their platforms to open APIs, and seeing the infiltration of third-party service providers. You saw cases where a third-party service provider was hacked, and then all that data was exposed from the mobile money providers – there is a lot of concern around that.” The global standards of security and systems offered by partners such as MasterCard and Visa can support and enhance offerings from operator groups in emerging markets such as Airtel or MTN, delivering significant value around the security side.
In terms of regional growth trends, East Africa is certainly maturing from an adoption viewpoint. The next steps will be to see new and pervasive innovation to drive usage and increase the breadth of what people are using mobile money for, and thereby driving volumes. Merchant payments are a critical indicator to see the digitalisation of cash – when people use mobile money more frequently for much smaller amounts, it shows that it’s becoming more relevant in their day to day. In West Africa, there has been impressive growth in adoption since COVID, but North Africa has been less of a contributor to the mobile money scene globally, representing a fairly small percentage in relation. However, Olson Onyango notes that the growth rates in this region are very impressive – around 44% compared to 12% in East Africa.
“Even though it’s coming in at a much later stage, when people are adopting it, they’re actually using it a lot more, they’re transacting a lot more. It’ll be interesting to see what that means for those markets, why they’re using it at those higher levels, and how other markets might be able to learn from that as well. Regulation has come in to support that innovation side… smartphone penetration is higher in North Africa than Sub-Saharan Africa.”
The GSMA Report highlights some of the innovation in East Asia/Pacific and South Asia; mobile money is growing strongly in these regions, and much of this is fintech-driven. The regulation has supported this, with mobile money providers essentially becoming fully licensed banks, allowing them to offer credit and savings products. There are fewer MNO-led mobile money providers; since this sector was viewed more as digital wallets and fintechs in this region, their evolution has followed this path towards becoming more of a digital bank, as opposed to harnessing that scale from the mobile network operator. This reflects the different priorities of the region; ultimately, in Africa the real need was to provide financial accounts and enable basic transactions that were previously unavailable.