Three major mobile money trends to watch in 2016

In the past five years, more mobile network operators have successfully scaled their mobile money services based on an agent-based model, helping increase financial inclusion by reducing the high infrastructure costs of traditional “bricks and mortar” banking. As mobile money continues to grow, potentially accelerated with the rise of smartphones, we see three major mobile money trends to watch in 2016.

1. Increasing adjacent revenue streams

Adjacencies are revenues or savings derived from asymmetric business models. Here are a few examples:


Over time, we anticipate more providers will experiment with alternate business models, like freemium and subscription models, and we expect these to emerge instead of charging consumers a fee for every transaction. This will be primarily driven by supplementing transaction revenues from adjacencies.

2. De-linking the SIM card to increase the addressable market

MNO-agnostic apps can help operators access users from other mobile networks. Zuum in Brazil is one example where customers have access to all mobile money features in the app, regardless of whether they are a Vivo subscriber (Zuum’s MNO partner) or another. In India, Vodafone m-pesa and Airtel Money are two examples of this. With the advent of smartphones, MNOs who previously could only provide mobile money services to their subscribers will now be able to increase their addressable market. This is an area we have been watching since 2014, and we’ll release new data in our 2015 State of the Industry Report launching later this month.

3. MNOs spinning off their Mobile Financial Services (MFS) business

In the Philippines, two mobile network operators have spun off their MFS businesses into separate subsidiaries. Mynt is a fully-owned subsidiary of Globe Telecom that aims to build a unified financial services offering. Similarly, PayMaya is backed by Smart e-Money, Inc. with close ties to Rocket Internet. This move allows the new business to focus purely on offering MFS and also makes it possible to attract additional investment. We anticipate other providers, particularly MNOs, will start exploring the benefits and risks of this approach.

Join the Conversation (4 comments)

  • Quite spot on Arunjay.

    I do think these three trends are already here in their infancy. I am particularly fascinated with the spinning off trend. I do strongly believe this is the way to go;
    1. MNOs are missing a fundamental differentiation in consumer need in the process of cross-selling their subscribers with MFS. From my experience, the dimensions of need of a customer in Telco and MFS are sharply different and the frame of reference in making a choice on competing products/services differs significantly. In my strongly considered opinion, the consumer need for communication and the consumer need for financial services are standing at two extremely opposite flagposts. Customers think of banking and related services when in mobile money and this is why any MNO restricting their MFS competitive set to other MNOs is not being sacrosanct with consumer insights, aspirations and expectations. In my opinion, MFS businesses of the future will thrive when they can think like the bank outside of the bank. Anticipating and fulfilling consumer needs will continue to be a key driver of success in MFS business.
    2. There are still some regulatory clashes in many markets and I think MNOs continuous ownership of their MFS businesses is not helping the journey towards a fully detangled the regulatory environment of MFS operations. Whilst some regulators are already enforcing a Chinese-wall-like demarcation between MNOs and their MFS businesses, I do believe the operators on their own can help the regulators by fully spinning off. I do believe fully separated and independent MFS businesses can be in a better position to stimulate and influence the direction of regulatory dictates in the industry. I do not believe that MNOs will lose out on the value that the MFS business is currently bringing to them in airtime savings and customer retention. They can still maintain a supplier-buyer relationship to keep these advantages. The incidence of shared services, channel of distribution and brand equity and their cost implications is one area to look at in taking this decision.
    3. I strongly believe a truly spun off environment will also help to evolve a clearer and more pragmatic value chain. In particular, the banks can find their true place in the value chain where they can accept that the MFS businesses are existing to fulfil the dimension of needs that are unlikely to be of significant interest to the retail banking structure. Also, the banks can truly fulfil their role in the chain and gain value from cash partnering with MFS businesses and even leveraging the MFS distribution as a provider of an agnostic agency banking

  • Charles Kabanda Ssentamu says:

    Thanks Arunjay
    In the East African region things seem to be happening faster.While in the beginning there appeared to develop some kind of skepticism on the side of banks,we now see banks embracing mobile money models in their transaction streams. That way,such innovative banks retain their relevance in the retail segment which incidentally cannot be ignored by a bank that keeps an eye on a double bottom line.In the region therefore we now are able to draw a clear line between Mobile banking and Mobile Money.In a way it is a solution for banking the hitherto unbanked populace. Consumer Service providers are also reaping big as settlement of regular bills has never been any easier.

  • Hello Arunjay and all,
    Nice article and shows how mainstream Mobile Money has become to the business of an MNO and to that of the users. The two other important trends are –
    1) Merchant payments on NFC POS via Mobile Money – this will really take off this year and will exponentially increase the volume+value of transactions through the systems.
    2) Linking of Visa/Mastercards to Mobile Money accounts – this increases the usability of Mobile Money to all the Visa/Master acquired merchants and online stores.

  • I think mobile money should target unbanked and underserved communities to be financially inclusive. Having a viable and effective agent network in these rural communities will immediately trigger a holistic adoption of mobile money. The presence of transaction points and the reality of being financially included are among the huge benefits that will spur the people to beginning using mobile money.
    With agent presence in the communities, people can now request those sending them money to use their mobile phones since there is a ready outlet where they can collect the cash equivalent.
    Agents will drive awareness about mobile money, on-board people, teach them how to use it, and provide all needed assistance until they are comfortable with the product.

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