Mobile money revenues and investments in 2015: A look at the data

July 14, 2016 | Mobile Money | Global | Jennifer Frydrych

This post is part of a series highlighting key findings from the 2015 State of the Industry Report on Mobile Money. Read the previous post on the usage of mobile money.

In 2015, we saw both revenues and investments in mobile money rise. Revenues grew by 40.3% (CAGR), and three-quarters of providers opted to maintain or increase their level of investment in mobile money.

A growth in active customers, the development of new product offerings, increased interoperability between mobile money services, and integration with third parties are all areas that contributed to an overall increase in revenues generated for the industry in 2015. Aggressive investment in all of these areas contributed to this increase, and to the wider expansion of the ecosystem, ensuring greater circulation of digital funds (i.e. less cash-in or cash-out vs. digital transactions), thus compressing costs for the providers whilst enhancing prospects for revenue generation.

Direct revenues growing steadily

In June 2015, 15 providers reported earning revenues of more than US$ 1 million, compared to 11 the previous year. Some common themes amongst these 15 deployments are: (a) they have all been in operation for more than 18 months, (b) 12 of the 15 have more than one million active 90-day customers, and (c) all but three of these providers are MNOs.

Twelve respondents more than doubled their revenues between September 2014 and June 2015. More than half (58.3%) of these deployments were in West and Middle Africa, where mobile money adoption and usage is rapidly gaining traction.

For a growing number of MNOs, revenue contribution from mobile money is overtaking revenue contribution from individual VAS products (typically 2-5% for ringtones, news or weather content)[i]. In June 2015, 25.6% of the MNO-led (11 of 43) deployments reported earning more than 10% of total revenues from mobile money. Encouragingly, the proportion of respondents earning less than 1% of total revenues from mobile money has dropped significantly since 2013 (from 50% in 2013 and 2014, to 28% in 2015).

Increasingly, mobile network operators are disclosing the revenue contributions from mobile money in their public financial reports:

  • M-PESA in Kenya now contributes 20% of Safaricom’s revenue, up from 19.6% in September 2014.[ii]
  • Millicom Group reports that total revenue from MFS across nine markets in Sub-Saharan Africa and Latin America & the Caribbean increased by 23.1% between Q3 2014 and Q3 2015. In Africa, MFS contributed 9% of total company revenues in Q3 2015.[iii]
  • In its FY2015 report Orange announced an increase of 64% in revenues generated by mobile money as compared to the previous year.[iv]

What are the sources of direct revenues?

The majority of respondents (76.5%) still derive most of their revenue from customer fees. However, this is less pronounced in Latin America & the Caribbean and Asia, where a greater proportion of respondents report obtaining the majority of revenues from business fees. This is reflected in the fact that a higher percentage of transactions in these two regions involve third parties. We expect that as payments ecosystems mature, sources of revenues will further diversify and institutional users of mobile money will provide a growing revenue stream. Commercial decisions on pricing models of the future may also impact revenue generation (see page 56 for more insights).

Indirect revenues

For mobile network operators, the indirect benefits of mobile money— churn reduction, uplifts in average revenue per user on the GSM business, or savings on airtime distribution—can be significant and help to strengthen the overall business case for mobile money services.

In its 2015 annual report, Safaricom Kenya reported selling 38% of total airtime via M-PESA, we estimate this resulted in a maximum cost saving of US$ 64 million[v].

Investing in mobile money

Most mobile money providers recognise the need to continue investing in the service long term. Three-quarters of respondents maintained or increased their investment in mobile money in 2015, compared to the previous year.

Investment in mobile money tends be driven by operational expenditures, including agent commission costs, marketing, and personnel expenditures. Agent commissions in particular represent a large cost category for providers. Mobile money providers compensate their agents for each cash-in, cash-out, and customer registration. In 2015, the top 10 mobile money providers[vi] paid out on average 54.4% of revenues as agent commissions. While agent commissions should decrease as a percentage of revenue as mobile money matures, agents continue to play a critical role in enabling mobile money transactions.

Beyond agent commissions, the GSMA estimates that MNOs should expect to invest six to eight times the revenue units generated by mobile money in the start-up phase. If the deployment is successful at acquiring at least 15% of its GSM base as active mobile money customers, modest positive margins can be expected. Only a mature, ecosystem-based deployment can expect healthy profit margins of more than 20%, making mobile money attractive relative to an MNO’s core GSM business. See this publication for more on profitability.

Investment in fintech has risen rapidly in recent years[vii], and although much of this investment is focused on banked customers in developed markets, we are seeing increasing interest in global markets and so we expect this to impact the mobile money landscape of the future.


Download the report



[i]  Recurring (service) revenue generated from value-added services (VAS) in the period, expressed as a percentage of recurring (service) revenue, GSMA Intelligence data, Q3 2013 – Q2 2014.




[v] 10,627,538,000 KSH (USD 103.8 million) of airtime seller commissions were paid in total by Safaricom in 2015 (assuming that Safaricom only pays airtime seller commission on the 62% of airtime it did not sell via M-PESA). We estimate that each percentage of airtime sold costs Safaricom 171,411,903 KSH (USD 1.7 million)

[vi] Ranked by 90-day active accounts

[vii] Globally, fintech investments have tripled in the last year from US$ 4.05 billion in 2013 to US$ 12.21 billion in 2014

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