A combination of invigorated activities from fintech start-ups and traditional financial institutions has shot Africa into the global limelight as the number one continent for mobile money.
Citing GSMA as source, financial analysts at global research firm, McKinsey stated that over half of the 282 mobile money services are located in sub-Saharan Africa.
“In Africa today there are 100 million active money accounts (used by one in ten African adults). This far exceeds customer adoption in South Asia, the second-biggest region for mobile money in terms of market share, with 40 million active mobile money accounts (used by 2.6 percent of adults),” the analysts noted in a blog post.
The analysts gave the different categories of mobile money services to include the full spectrum of financial services (MFS), from payments and current accounts, to savings, loans, investments, and insurance. According to them, mobile money is a subset of MFS that is provided by telecom operators.
MTN Mobile Money and MPesa are the two leading mobile money providers in Africa. MPesa earned an impressive $550 million in mobile money revenues representing 19 percent of the total revenue in the continent from 2016-2017 while MTN Mobile Money grossed $205 million (15 percent) within the same period.
Mobile money providers also fall into five different categories including Mobile Network Operator (MNO-dominant); MNO-led partnership; bank-led partnership; bank-dominant; and third party (fintech startup).
For third party providers, the analysts singled out Nigerian-based fintech firm, Paga as a successful example.
Paga has grown its customer base by 81 percent annually, expanding from one million registered customers in 2013 to more than six million today.
“Paga, which has processed $500 million in payments in 2016, is now a fully fledged payments company allowing customers to send money via their phones and pay for online purchases on merchant websites,” they wrote.
Although they noted that banks activities in mobile money services has picked up in recent times, the financial institutions can do better by devising a plan that fits into their multichannel strategy for delivering consumer and commercial services. Businessday.