Mobile money: from brand loyalty to a revenue stream for telcos

Mobile money: from brand loyalty to a revenue stream for telcos

It was not so many years ago when mobile network operators regarded mobile money as a nice to have service with more indirect benefits, such as brand loyalty or reputation. The size of the market was still small and so were the revenues from this business activity. But as the time went by mobile money market was growing in terms of supply and demand. Today, mobile money is widely considered as a source of direct revenues.

According to GSMA’s latest report, “2017 State of the Industry Report on Mobile Money”, last year the market surpassed $2.4 billion in direct revenues, reaching a 34% year on year increase, while it contributed more than 10% of mobile operators’ total revenues.

Some other key findings of the report are:

  • Total transaction values grew by 21 per cent from $26 billion in December 2016 to over $31.5 billion in December 2017
  • More than 136 million new accounts were registered, bringing the global total to 690 million mobile money accounts, a 25% increase from 2016
  • Market is expanding its offerings. Over 20% of deployments now offer a savings, pensions or investment product with another 37% intending to over the next year
  • On average, an active customer in 2017 moved $188 per month
Sub-Saharan Africa has long been the epicenter of mobile money, and growth in this region shows no sign of slowing. In terms of mobile money accounts, Sub-Saharan Africa is the biggest market in the world. Almost half of total mobile money accounts are in Sub-Saharan Africa as they reached 338.4 million. A number which is indicative to the fact that mobile money has achieved mass-market adoption in all corners of the region, enabling millions of people to access financial services for the first time.

Source: 2017 State of the Industry Report on Mobile Money

Some very characteristic examples at the region is that M-Pesa contributed over 27.3% of Vocacom’s revenue in Tanzania or the fact that between Q2 and Q3 2017 mobile money revenues as a proportion of total operator revenues in Zimbabwe grew accordingly, from 13.1% to 18%. In just five years’ time, registered accounts of our partner, MTN Ghana, increased five-fold, while active 90-day accounts increased 11-fold. The report also notes that “the spread of mobile money beyond traditional footholds is also happening within Sub-Saharan Africa as Western and Middle Africa were the fastest growing areas of the region, led by tremendous growth in registered accounts in countries like Ghana, Côte d’Ivoire and Cameroon.

Source: 2017 State of the Industry Report on Mobile Money

Despite those impressive numbers of Sub-Saharan Africa, for the first time, most industry growth came from outside Africa. South Asia saw the highest year-on-year growth in accounts of any region (47 per cent), representing 34% of registered accounts globally.

As for the basic priorities for the future, providers of mobile money services should emphasize on two:  greater rural penetration and reaching women.

If you want to read the full report click here.

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