Mobile Money Industry Continues to Grow With Services Now Available in 61 Per Cent of Developing Countries Globally
Barcelona: The GSMA’s Mobile Money for the Unbanked (MMU) programme today released its fourth annual ‘Mobile Financial Services State of the Industry Report’, providing a quantitative assessment of the state of mobile financial services, including mobile money, mobile insurance, mobile savings and mobile credit. The report draws on the results of the annual MMU Global Adoption Survey of Mobile Financial Services, as well as data from the online MMU Deployment Tracker and qualitative insights on the performance of mobile financial services from the MMU programme’s engagement with the industry over the last year.
“As this report demonstrates, mobile financial services have an important social and economic impact on millions of people in emerging markets around the world,” said Tom Phillips, Chief Regulatory Officer, GSMA. “Mobile is a key enabling tool for financial inclusion and over the last year, we’ve seen significant growth in mobile financial services, not only in the number of services and geographies served, but also in the breadth of products that are now available to previously unbanked individuals. It’s critical that we continue to build on these foundations to truly drive this industry to scale.”
Growing and Expanding Services
Mobile money has been growing rapidly over the past few years, and with 255 services in 89 countries, mobile money is now available in 61 per cent of developing markets1. Mobile network operators (MNOs) have led in the provision of 149 of these services, demonstrating the important and growing role they are playing in the development of the mobile money industry. In Sub-Saharan Africa, the birthplace of mobile money, over 50 per cent of all MNOs have already launched a mobile money service and by December 2014, 23 per cent of all mobile connections there were linked with a mobile money account.
Mobile money continues to transform the way people access financial services: in three-quarters of the markets where mobile money is available, agent outlets outnumber bank branches and in 25 markets, there are more than ten times as many mobile money agents as bank branches. The report shows that the number of active mobile money users continues to grow rapidly year-on-year, with more than 100 million accounts active as of December 2014, compared to 73 million in December 2013, an increase of 41 per cent. Half of all new mobile money launches took place outside of the Sub-Saharan Africa region; for instance, in Latin America and the Caribbean, the number of active accounts increased by 50 per cent over the year, demonstrating the significant traction that mobile money is gaining globally.
Increase in Interoperable Mobile Money Services
As mobile money becomes a core service offering for MNOs, increased competition and customer demand has led to greater interest in the development of account-to-account interoperability. In 2014, operators in Pakistan, Sri Lanka and Tanzania interconnected their services to allow their customers to send money directly to mobile wallets on other networks, following in the footsteps of operators in Indonesia, where interoperability was implemented in 2013. Operators in other markets have also committed to interconnect their services, paving the way for the creation of a ubiquitous digital services ecosystem.
Enterprises Benefiting From Ecosystem Development
Throughout 2014, transaction volumes have dramatically increased across a range of mobile money offerings, involving a wider ecosystem of institutional and business users including merchant payments, bulk disbursements (such as employee salary payments and delivery of government social transfers) and bill payments. In December 2014, transactions involving external companies using mobile money as a platform to receive and make payments drove the growth in mobile money globally, representing 24 per cent of the total value of all transactions processed in that month.
Mobile money providers are continuing to invest in improving and expanding their services, particularly through the development of the ecosystem such as acquiring additional merchants, working with institutional clients and with governments planning to use mobile money to make and accept mobile money payments. Over 80 per cent of respondents indicated that they had maintained or increased investment in 2014 over the previous year. Providers are strengthening their internal capabilities to address an increasing number of users and transactions through platform migrations and the extension of application programming interfaces to third-party users.
Expanding Mobile Money Services and Financial Inclusion
Providers are expanding into new business areas for mobile financial services, enhancing their mobile money proposition through provision of products such as mobile insurance, mobile savings and mobile credit. As of December 2014, there were 100 live mobile insurance services in 30 countries around the world, accounting for 17 million policies with unbanked customers.
Mobile financial services such as these play an increasingly critical role in developing countries, helping to provide access to credit for many first-time formal borrowers and reducing the costs of administering low-value policies, which have proven uneconomical for many traditional providers. For example, in Bangladesh, the country’s two leading operators have served nearly 9 million customers with mobile life insurance, demonstrating the huge potential for mobile to reach those who are most vulnerable to financial shocks.
Supporting Investment for the Long Term
Despite its significant growth over recent years, the mobile financial services industry continues to face challenges that will need to be addressed in order to ensure the continued provision of mobile financial services to unbanked and underserved users. Regulatory barriers, low levels of investment and the need for greater industry collaboration limit the ability for mobile money to reach scale. The GSMA is working with industry partners by facilitating and supporting collaboration among member companies as well as with banks and other external parties to evolve the sector to a new phase of maturity.
Phillips added, “Mobile network operators are making critical investments in systems, technology and platforms for mobile money services and as a result, the industry is starting to experience sustainable revenue growth. However, it is important to recognise that mobile money requires long-term, patient investment as the majority of mobile money services are still waiting to break even as they invest in the foundations of these life-enhancing services.”
Notes to Editors
A full copy of the report can be found at:
More information on the MMU project can be found at: http://www.gsma.com/mobilefordevelopment/programmes/mobile-money-for-the-unbanked/about
1184 of 139 developing markets, based on the World Bank list of developing countries.
About the GSMA
The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai and the Mobile 360 Series conferences.
For the GSMA
+44 7917 298428
GSMA Press Office