The growth of mobile money: Driving financial inclusion for the underserved

What a year this has been for mobile money! In every region where the GSMA tracks mobile money services, we found they are growing faster and reaching more people than ever before. As we launch the State of the Industry Report on Mobile Money 2023, another 184 million people are now mobile money users since the last edition, adding up to 1.6 billion customers worldwide.

What was driving this growth in 2022?

In part, regulatory changes in Africa. In Nigeria and Ethiopia, new mobile money players entered the market, the number of new registered agents leapt by more than 40% and millions of first-time users began reaping the benefits of digital payments, credit and savings. Long a world leader in mobile money, Sub-Saharan Africa is now home to 763 million registered accounts – almost half the global total – with more than 217 million accounts being used every month.

In terms of speed, the Middle East and North Africa – though still low in absolute numbers – were far out front in 2022 with a 39% year-on-year growth rate in registered accounts, followed by Latin America and the Caribbean at 13%. Meanwhile, South Asia accounted for 20% of all new accounts and East Asia and the Pacific are now home to more than one in five registered accounts – compared to one in ten in 2018.

New accounts are just the start, however. For mobile money to reach its commercial potential and support financial inclusion, accounts must be used actively. In 2020, COVID-19 restrictions made mobile money a convenient and safe way to shop, pay bills and send money, driving up usage. Two years on, the number of mobile money accounts active on a 30-day basis grew at an annual rate of 13%, lower than what we saw in 2020 and 2021 but higher than before the pandemic. Double-digit growth remains the norm.

Transaction values are also up, and we are delighted to see that our forecast for 2022 was too conservative. After crossing the $1 trillion mark in 2021, mobile money transaction values set a new record in 2022, growing by 22% year on year to approximately $1.26 trillion. This means that $3.5 billion a day was transacted last year – half a billion more than we had predicted. This trend has been fuelled by a shift away from cash transactions to digital, particularly interoperable bank transfers and bill payments.

What does this mean for revenue and livelihoods?

Mobile money providers (MMPs) continue to rely heavily on customer fees, mainly from cash-out transactions and domestic P2P transfers. As the uptake of mobile money grows and the ecosystem diversifies, providers can tap into new income streams, particularly fees from bill and merchant payments, international remittances and digital credit.

New use cases also present opportunities for MMPs to diversify and build commercially sustainable and socially impactful business models. This year’s report continues to feature mobile money services that not only help people with their day-to-day needs, but also have a lasting socio-economic impact.

For example, partnerships between MMPs and pay-as-you-go (PAYG) solar providers have opened access to essential utilities and clean energy. Asset financing for solar home systems has also made it possible for previously unbanked, low-income consumers to build a credit history, access a wider range of financial services and invest in other life-enhancing products and technologies. From smartphones to clean cooking appliances and refrigeration, these products not only represent a huge commercial opportunity for MMPs, but also a foundation for healthier households and more productive businesses.

Closing the mobile money gender gap

Sadly, there remains a cloud in the picture: Progress on closing the long-standing gender gap stalled and, in some countries, even reversed in 2022. The ongoing economic crisis has left women with lower incomes, lower access to mobile phones, lower awareness of mobile money and therefore lower access to mobile money services than men. Today, women are still 28% less likely than men to own a mobile money account. The barriers to mobile money account ownership continue to include a lack of perceived relevance, lack of a mobile phone, lower digital skills and more restrictive social norms, which impact rural women even more than their urban counterparts.

The good news though is that when women do own a mobile money account, they tend to use it as much as men do. Active mobile money usage is one step towards greater financial inclusion, independence, and decision-making power, and more must be done to ensure women can reap these benefits. This includes putting inclusive policies and regulations in place and designing mobile money infrastructure and services that meet women’s needs and tackle the barriers they face.

As we only scratched the surface in this short summary, we invite you to get your virtual copy of our State of the Industry Report on Mobile Money 2023 for data and insights on the latest trends, where the industry is heading and the life-changing benefits of mobile money.