The post is part of a series looking at key findings from the 2014 State of the Industry Report on Mobile Financial Services.

Last month, we discussed mobile money adoption by users around the world and calculated that 103 million people globally were making transactions via mobile money on a monthly basis. In this blog post, I’ll take a closer look at what types of transactions people are making, and what people are using mobile money for. This year, for example, we have seen a large increase in the number of business and institutional users, indicating a growing mobile money ecosystem for digital payments of goods and services. Let’s delve a little deeper into the figures:

Global transactions: what’s the status today?

Globally, mobile money users transacted a total of USD 7.5 billion through 479.5 million transactions in the month of December 2014. If cash-ins and cash-outs are included, mobile money users performed 717.2 million transactions, totalling USD 16.3 billion.

Today, these transactions don’t just represent individual users, but a wide range of companies and organisations who use mobile money as a channel for making and collecting payments for goods and services. Nearly a quarter (23.1%) of all the value processed through mobile money systems globally in December 2014 was for transactions involving these ecosystem players (including bulk salary payments and government disbursements), in addition to bill payments and merchant payments.

Which mobile money products are most popular?

Domestic person-to-person (P2P) transfers and airtime top-ups continue to dominate the global product mix in terms of volume and value. Not surprisingly, these two products are offered by the vast majority of mobile money providers:

• Airtime top-ups are the most frequently transacted product by far, with active mobile money users performing an average 4.5 top-ups in December 2014. Nevertheless, while airtime top-ups represent nearly two-thirds of all mobile money transactions in that month, at just USD 0.80 average value per transaction, they contribute a mere 3.3% to total values processed globally.
• Domestic P2P transfers are the largest contributor to the global product mix in terms of value processed (72.8%). Active mobile money users conducted an average of 1.6 P2P transfers in December 2014.

While these products continued to see steady growth throughout 2014, other products are seeing greater traction among users, partly due to important innovations taking place in the mobile money industry.

Interoperability & cross-border mobile money remittances are changing the face of P2P

Mobile money remittances are expanding, both domestically and internationally, to allow users of different networks to transact with each other more directly.

• Today, operators in 4 markets have interconnected their mobile money services to enable customers to send domestic P2P transfers directly to the account of a user on another scheme. These pioneers are paving the way for an important trend as MNOs in more markets choose interoperability.
• Likewise, new partnerships between mobile operators are creating new avenues for sending money internationally, through the introduction of cross-border mobile money remittances. Despite representing a relatively small portion of the global product mix overall, international remittances via mobile money was in fact the fastest growing product in 2014 (65.5%).

Mobile money is supporting a growing ecosystem for payments

Active usage of bill payments is increasing, while merchant payments and bulk disbursements are driving growth of the mobile money ecosystem.

• Bill payments are the third most commonly offered product by mobile money providers and represent the second largest contribution to the global product mix by value (11.7%). Active mobile money customers made an average of 0.3 bill payments in December 2014, demonstrating the importance of a regularly recurring transaction to drive active usage.
• A steady rise in bulk disbursements shows how an increasing number of governments and companies are putting their trust in mobile money services for the wide-scale distribution of salary payments, social security and benefits disbursements, and agricultural subsidies among others. At an average transaction value of USD 52.7, bulk disbursements represent an important channel for bringing value into the mobile money system.
• Of all the payment transaction types, merchant payment volumes grew the fastest in 2014 (58.5%), and experienced the highest global increase in value transacted (78.6%). While globally merchant payments represent less than 5% of all value processed, there is strong potential to increase merchant payment activity, as only 25.4% of registered merchants actually accepted a mobile money payment during the month of June 2014.

In the next post in our series, we’ll discuss what the impact of increasing usage of mobile money is on revenues for mobile money providers, and how this is encouraging providers to invest more in the systems and operational infrastructure to serve an increasingly diverse range of customers and products.