Africa now accounts for 70% of the global mobile money value of $1 trillion. The value of African mobile money transactions increased 39% to $701.4 billion in 2021 from $495 billion in 2020, highlighting that the future of African banking is mobile.
GSMA figures released on April 21 show mobile money transaction volume rose 23% to 36.7bn in 2021 from 27.5bn in 2020.
In the review period, registered mobile wallets in Africa exceeded 621 million, an increase of 17% from the 562 million captured in 2020.
There are now more than 184 million active mobile money wallets on the continent compared to 161 million accounts just over a year earlier.
Africa is a pioneer in mobile money
According to Ashley Olson Onyango, Director of Financial Inclusion at the GSMA, while mobile money use has become a global phenomenon, African users remain a significant factor.
“As a result, businesses and individuals alike have benefited from this accelerated digitization of payments, unlocking access to more products and services, building financial resilience and creating business opportunities,” he said.
The African mobile money ecosystem is also rapidly diversifying, like the rest of the world, from business to consumer (B2C) to business to business (B2B).
“A key feature of the industry’s progress in recent years has been the rapid diversification of mobile money beyond its key traditional use case: person-to-person transactions (for example, transferring money to family and friends). Onyango said.
“In 2021 in particular, the mobile money industry has become critical in helping small businesses operate more efficiently and improve the customer experience. Mobile money-enabled merchant payments nearly doubled in value as of 2020, reaching a global average of $5.5 billion in transactions per month.”
The pandemic was instrumental in driving the mobile money market to the value of $1 trillion
According to the GSMA, the total value of global transactions in 2021 was $1.045 trillion, 31% more than in 2020.
While the trillion dollar mark was a long-awaited industry goal, the GSMA had initially predicted that it would not be achieved until 2023.
But several years of strong growth have prompted earlier forecasts to be revised more than once, due in part to the push for digitization during the Covid-19 pandemic.
“Cash-in and cash-out and person-to-person (P2P) payments still account for most of the value, but more people in low- and middle-income countries are living increasingly digital lives thanks to mobile money: they pay bills , school fees and a variety of online and offline merchants through mobile money accounts. These different use cases will be examined more closely in the next chapter, the report reads in part.
In what the GSMA calls “another milestone” for the industry, for the first time in 2021, P2P transactions exceeded $386 billion or more than $1 billion per day.
Africa and the Middle East are the fastest growing markets for mobile money
Transaction values grew fastest in the Middle East and North Africa (49%), Sub-Saharan Africa (40%) and Latin America and the Caribbean (39%).
In the coming years, the GSMA projects that growth will come from both long-established mobile money markets and markets where mobile money services are still nascent, especially in South Asia and African countries such as Nigeria, Ethiopia and Angola.
For example, in 2021, Ethiopia saw the launch of a mobile network operator (MNO)-led mobile money service, and the Central Bank of Nigeria granted Approval in Principle to major MNOs to operate mobile money services in the country. country.
“In 2021, as in previous years, the vast majority of new active accounts (30 days) were added in Africa and Asia, specifically Sub-Saharan Africa, East Asia and the Pacific. However, by far the fastest growth was in the Middle East and North Africa (MENA) region due to notable growth in the Middle East,” the GSMA said in the report.
“Although the region represents only four percent of the industry, new active accounts increased 68%, followed by Latin America and the Caribbean (34%) and East Asia and the Pacific (23%)”
Furthermore, it shows that the mobile money industry is more global than ever.
In 2012, mobile money was largely an East African phenomenon, with sub-Saharan Africa accounting for 84% of all active accounts (30 days).
In 2021, the mobile money map was redrawn, with sub-Saharan Africa accounting for just over half of active accounts and South Asia accounting for 20%, surpassing East Asia and the Pacific (19%). ).
“In the space of a decade, the number of mobile money providers has almost doubled and their reach has grown dramatically. In 2012, the majority of services (83%) had fewer than 100,000 active accounts and only four (2%) had more than one million active users,” the report shows.
“By 2021, this number had grown to 67 services (22%), and the landscape was much more complex, with services of all sizes.”
The original version of this story was republished with the permission of bird, a story agency under Africa No Filter.