This is the first report in the series. Click here to read the second report.
We’re pleased to release the first in a series of insight papers exploring trends in the 2017 State of the Industry Report on Mobile Money. In this deep-dive, we take a look at the narrowing gap in both mobile internet access and smartphone adoption in recent years, and how the mobile money industry is responding to these shifts.
When we first wrote about industry opportunities around smartphones, there were material gaps in both mobile internet access and smartphone adoption in emerging markets. Since then, digital inclusion in these markets has improved significantly:
- 1.74 billion new users will come online by 2025, most of whom live in emerging markets where mobile technology is most people’s only channel for accessing the internet.
- In Sub-Saharan Africa, mobile internet penetration has more than doubled in the last five years to 21 per cent, with 280 million new mobile internet subscribers estimated to come online between now and 2025. In South Asia, penetration has doubled over the same period, with approximately 470 million more users expected to be online by 2025.
- Smartphone adoption has been particularly strong in regions where mobile money is prevalent: in South Asia, smartphone adoption reached 43 per cent by the end of 2017, while in Sub-Saharan Africa it reached 34 per cent in the same period. By 2025, smartphone adoption in these regions is projected to reach 74 per cent and 67 per cent, respectively.
Increasingly, mobile money providers are leveraging the growth in mobile internet access and smartphone adoption to build an active user base. Apps are the second-most offered channel according to respondents of the GSMA’s Global Adoption Survey of Mobile Money, with the percentage of providers offering a mobile money service through a smartphone app increasing from 38 per cent in 2014 to 73 per cent in June 2017. However, despite the prevalence of smartphone apps, overall usage remains low, at just 20 per cent on average. In fact, according to respondents of our survey, over three-quarters of providers reported that over 85 per cent of their transactions are still conducted via USSD.
In this context, our report explores how the mobile money industry can continue to reach those at the base of the economic pyramid who predominantly rely on basic and feature phones, while at the same time anticipating and creating solutions that can keep pace with the evolving demands of the underserved of the future.