Profitability 2.0: Ecosystem-driven business modelling and the future of mobile money margins
The past decade has seen mobile money providers across the globe achieve profitability at scale, enabling them to continue investing in expanding their services to the ‘last mile’, and reaching financially excluded populations. In some instances, this has also helped them improve their product offering, to meet the evolving demands of their customers. Profitability has been achieved through high uptake and growing fee-generating transaction volumes/values. Indeed, over 1.2 billion mobile money accounts now exist globally, and the industry as a whole is processing more than $2 billion per day.
Over this same period, a set of key trends have been indicating a likely disruption to mobile money providers’ prevailing transactional make-up. As these revenue and cost drivers shift, business models must be expanded beyond transactional fees, paving the way for a transition to a ‘payments as a platform model’ – a strategic shift whereby more value remains digital while revenue sources are increasingly diversified.
Building on previous GSMA outputs and new data, this report revisits the economics of mobile money businesses. We demonstrate the case and timeliness for a transition to a more resilient ecosystem-centric profitability model through three stages and formulate key recommendations on opportunities and risk mitigation.