Reflections and celebrations

It has been a busy start of the New Year for the Mobile Money programme, as we prepare for Mobile World Congress and the launch of the Decade Edition of the Mobile Money State of the Industry report. Nevertheless, this is an opportunity to pause and reflect on why we invest in supporting the growth of the mobile money sector. In the last quarter alone, the GSMA and its partners have produced valuable insights on the benefits of mobile money—beyond financial inclusion—and what it takes to get there.

In October, we showed that mobile money is driving a price revolution in international remittances—it’s more than 50% cheaper, on average, to send funds internationally via mobile money than through traditional money transfer operators.  Even when the fee to cash out is included, the total transaction cost was, on average, more than 20 percent cheaper. In practical terms, this means more money in the hands of remittance recipients around the developing world. The finding gets to the heart of our industry’s commitment to advance the UN Sustainable Development Goals on lowering remittance transaction costs and reducing poverty. Of course, the recent announcement of the prospective acquisition of MoneyGram by Alibaba’s Ant Financial, will have implications for the future of international money transfers globally, and we expect to see more partnerships emerge.

In November, we produced the first large-scale quantitative assessment of mobile money success factors, in collaboration with a Harvard Business School professor and an independent economist. This study confirmed that an enabling regulatory framework is one of the most important determinants of success, and that mobile operators play a leading role in delivering mobile money at scale.

In December, we turned to the market that will shape the future of mobile money – India. We published a report showing the business case for Indian Payments Banks. The short story is that the investment horizon is long, but that the Payments Bank model can deliver healthy margins if providers diversify into adjacent services. This is timely, given the government’s demonetisation efforts have created an imperative for Indians to transact without cash, and payments banks are just starting their journey.

Our partners have produced seminal studies in recent months, which will be referenced for years to come.

The McKinsey Global Institute, together with the Bill & Melinda Gates Foundation, launched a report last fall which estimates that digital finance can add US$ 3.7 trillion in additional annual economic activity by 2025—a boost of 6 percent compared with a business-as-usual scenario. This additional GDP would expand aggregate demand and could create nearly 95 million new jobs throughout the economy. The rapid adoption of mobile technology is vital to achieving this.

Just last month, a new study by professors from MIT and Georgetown provides the strongest evidence we’ve seen to date of how mobile money reduces poverty and drives economic development. It estimates that M-Pesa has lifted fully 2% of the Kenyan population out of poverty. The most exciting finding is that these gains are especially significant for women. Thanks to M-Pesa, nearly 200,000 women were able to transition from subsistence farming into business or retail sales.

We’ve known for some time that mobile money generates broad economic and social benefits, and now we have a deep evidence base on its impact and future potential.  We will be using the launch of our Decade Edition of the Mobile Money State of the Industry report next month in Barcelona to celebrate the diverse community of stakeholders that have made mobile money such a transformative service in many markets around the globe, and bring together those who are laying the foundation for the exciting future ahead.

We look forward to your continued partnership as we ramp up our efforts to accelerate the development of the mobile money ecosystem.


Best wishes from the GSMA Mobile Money Programme


Read and re-read some of our top blogs:

1. New GSMA research shows that mobile money is driving a price revolution in international remittances

2. Launching GSMA Mobile Money APIs to raise industry capabilities

3. Highlights from the Mobile Money API Hackathon: Testing harmonised mobile money APIs for the industry

4. New Self-Assessment Toolkits available for the Code of Conduct for Mobile Money Providers

5. What factors predict success for mobile money? New evidence from cross-country multi-variable regression analyses

6. India’s new payments banks require a new business model for digital financial inclusion

7. Merchant payments: Why it’s important and how to scale it for mobile money

8. Government payments via mobile money: What does the global landscape look like?

9. Mobile Financial Services and MSMEs: What are the benefits of encouraging the use of mobile financial services among MSMEs?

10. Four reasons why a smartphone strategy is no longer optional for mobile money providers