In May 2022 Ghana’s Ministry of Finance faced a genuine fiscal dilemma. Electronic transfers were growing quickly, they were visible to the tax authority and, unlike much of the cash economy, they were easy to tax. The government therefore introduced an Electronic Transfer Levy at 1.5%. GSMA analysis observed an immediate decline in mobile money usage and transaction values following the introduction of the levy.
The levy was then reduced to 1% from January 2023 through the Electronic Transfer Levy (Amendment) Act, 2022 (Act 1089), and fully repealed in April 2025 through the Electronic Transfer Levy (Repeal) Act, 2025 (Act 1127).
This fiscal dilemma is now shared across much of Sub-Saharan Africa. Mobile money has evolved beyond simply a way to send funds to family and friends. It is increasingly how people pay merchants and utility bills, receive wages and remittances, save, borrow and access insurance. For millions of people in Africa, it is becoming part of the critical infrastructure of commerce. As mobile money becomes critical infrastructure, policy must also safeguard operational resilience, consumer protection and service continuity.
For instance, in 2025, the mobile money industry reached 2.3 billion registered accounts and with 593 million active 30-day accounts. This marks the highest annual increase in monthly active accounts since 2021. More than $2.1 trillion flowed through mobile money wallets, twice the value recorded four years earlier. Sub-Saharan Africa witnessed $1.4 trillion worth of transaction values flowing through 92 billion transaction volumes in mobile money wallets. East Africa generated almost half of all new monthly active 30-day accounts while West Africa accounted for 16%. Evidence held by the GSMA estimates that a 10 percentage-point increase in mobile money adoption can raise annual GDP by between 0.4 and 1%.
More importantly, the diversity of transactions is changing. In 2025, merchant payments grew by 42% to $155 billion, becoming the largest ecosystem transaction by value. Bank-to-mobile transfers reached $167 billion and mobile-to-bank transfers $163 billion. Savings, insurance and small-value credit are also expanding. According to the GSMA’s Global Adoption Survey, mobile money providers offering insurance increased at a faster rate than those offering credit or savings. This suggests that mobile money is evolving from a cash-transfer mechanism into a more integrated financial ecosystem.
This evolution matters for Africa. Mobile money brings formal financial services closer to customers who are underserved and live in rural areas. It helps households manage everyday expenses and financial shocks, enables businesses to transact more efficiently and supports government, humanitarian and development payments.
However, financial inclusion alone is not enough. The value of mobile money depends on whether people can afford to use it regularly in their day-to-day lives.
The price that matters
The GSMA’s affordability research Mobile Money Taxes and Affordability in Sub-Saharan Africa shows why the structure of prices matters. Globally, an active mobile money account processes an average of 211 transactions a year, with an average transaction value of $15.50. For small transactions below $10, fees can take up nearly 5% of the value sent compared to 1% or less for high-value transactions. Therefore, small and frequent payments, that are commonly transacted by the lower-income households and microenterprises, carry the heaviest relative cost.
An IMF working paper published in 2025 makes the point vividly. In Cameroon, a nominal levy of 0.2% raised the average consumer price of taxable transactions by about 19.5% because the tax was large relative to the operator fee. Across African countries, the same paper finds that, by the second year after a mobile-money tax is introduced, active accounts are about 20% lower and transaction numbers more than 10% lower compared with what would likely have happened without the tax.
Mobile money affordability is shaped by a layered cost stack. At the operational level, providers must fund technology platforms, cybersecurity, customer support, product development and the agent network that makes cash-in and cash-out possible. On top of these commercial costs sit regulatory and policy pressures including sector-specific taxes, license fees, interoperability costs and, in some markets, price controls. Each layer may appear manageable on its own, but together they determine whether mobile money remains affordable for customers and sustainable for mobile money providers and agents.
Poorly calibrated fee caps can undermine the sustainability of mobile money services. Where caps push tariffs below the efficient cost of service provision, they can compress provider and agent margins, weaken investment incentives, impair agent-network viability and ultimately reduce service availability. Regulatory authorities should therefore distinguish retail fee caps from wholesale or interchange controls and from targeted interventions designed to address specific competition concerns. However, any pricing intervention should be supported by a transparent cost-based assessment, proportionate to the identified market concern, subject to stakeholder consultation, and reviewed periodically to ensure that consumer protection objectives are achieved without weakening service quality, market sustainability or financial inclusion.
Why the stakes are unusually high
Mobile money has generated considerable social and economic gains. The World Bank’s latest Findex shows how central it has become to financial inclusion in the region. Earlier peer-reviewed work found that expanded access to M-PESA in Kenya increased consumption and lifted an estimated 194,000 households, or 2% of Kenyan households, out of poverty, with particularly strong effects for female-headed households.
Taxes and levies create more direct pressure on the affordability of mobile money. GSMA’s affordability research finds that levies exceeding 0.2% of transaction value can significantly affect prices and consumer behaviour. While the case for taxing mobile money is usually framed around domestic resource mobilisation, the GSMA research finds that in most markets mobile money levies generally contribute only a modest share of total tax revenue unless high rates are imposed. In most markets assessed, mobile money levies generated less than 0.5% of total tax receipts, meaning the fiscal gain was small unless governments set rates high enough to risk reducing usage, affordability and financial inclusion.
Therefore, a more affordable mobile money ecosystem will require policy choices that recognise governments’ legitimate revenue needs without reversing the gains achieved by mobile money on financial inclusion.
Design can be better
GSMA research finds that rates above 0.2% place significant pressure on prices and can generate behavioural distortions that undermine affordability and financial inclusion. Exemption thresholds should protect lower-value transactions, with the GSMA research recommending exemptions for transactions below $10 and, depending on market circumstances, up to $20. Such thresholds should be periodically adjusted for inflation while remaining sufficiently simple and predictable to administer and understand. Flat and tiered levies should be approached with particular caution, as they tend to be more regressive and can impose a disproportionately high relative cost on lower-value transactions. Targeted exemptions are also appropriate for clearly defined groups including people with disabilities, social protection recipients, and savings groups to incentivise their access and use of financial services. Exemptions should be administratively feasible and avoid creating unintended distortions. However, exemptions for registered businesses have shown to be detrimental to the poorest segments of the population who work in the informal economy and who tend to be on lower incomes. At the same time, comparable bank and mobile money transactions should receive equivalent tax treatment. Sector- or technology-specific levies that place mobile money at a disadvantage can distort competition and disproportionately burden low-income, rural and unbanked users who depend on mobile money as their principal gateway to formal financial services.
Careful regulatory design can mitigate unintended impacts on low-income and low-value users while still achieving the intended policy objective for example, Nigeria’s exemption threshold for lower-value transfers illustrates how features such as transaction thresholds can make interventions more proportionate, targeted and supportive of financial inclusion. Moreover, Kenya’s 2023 reforms harmonised excise duty on money-transfer fees at 15% for mobile-money and bank transactions. That did not remove the tax burden, but it improved neutrality between payment channels. Fiscal policies should also be considered alongside interoperability, competition and price regulation. A levy that appears modest can become more damaging in a market with limited competition or high underlying costs. Wholesale or interchange pricing, access rules, governance and cost allocation can also affect pass-through to consumers and provider sustainability. Conversely, poorly designed fee caps may lower prices temporarily while undermining agents’ network which has been the backbone of mobile money industry.
Affordability as a policy test
Finally, levy design should be simple, predictable and designed through coordination among ministries of finance, central banks, telecommunications regulators, mobile money providers and other relevant institutions in the governance of the sector to enhance stability and predictability. Policymakers and regulators also need to ensure that impact evaluations of the levies are conducted ex-ante and ex-post and the reports made available for public scrutiny.
Governments need to publish the assumptions behind revenue forecasts, monitor transaction volumes and cash substitution, and review effects on agents, providers and different customer groups. Where uncertainty is high, review clauses or sunset provisions can force policy to learn rather than drift.
This approach will avoid general, one-size-fits-all policies and will improve the evidence base for policy and support an impact analysis by community and constituency.
Governments could also consider alternative revenue options, such as the digitalisation of tax collection while balancing the revenue generated from the levy with the negative impact on financial inclusion before imposing sector-specific transaction levies. Mobile money can be part of the solution to domestic resource mobilisation by helping governments improve tax collection and formalisation, rather than automatically becoming the tax base itself. World Bank research on tax administration in Africa for example shows how information technology can help governments identify the tax base, monitor compliance and make filing and payment easier. For example E-filing, e-payment and risk-based audits can broaden the base without penalising the act of paying digitally.
The policy choice is therefore not between revenue mobilisation and financial inclusion; it is between well-calibrated regulation and measures that risk undermining both. Before introducing or increasing a mobile money levy, governments and regulators should apply a clear test: will the levy generate meaningful revenue, will it keep low-value transactions affordable, and are less distortive options available to broaden the tax base? Where a levy fails that test, it should be redesigned, narrowed or reconsidered. Protecting mobile money affordability should be treated as a core regulatory objective because affordability underpins usage, agent-network viability, investment and the continued delivery of the wider economic and social benefits that mobile money has enabled across Africa.