Africa dominates 1.2bn global mobile money market, despite Covid19 – GSMA report

…Daily transactions exceeded $2bn, GSMA expects above $3bn a day in 2022

…SSA at forefront of MoMo industry over a decade, still topped 2020 growth with 43%

…But barriers still persist, as 33% women less likely to have MoMo account

Ben Eguzozie, in Port Harcourt

Africa, though significantly strained by Covid-19 pandemic, still dominates by almost half of the over 1.2 billion globally registered mobile money users, said the GSMA’s 2021 state of the industry report on mobile money.

The GSMA is an industry organisation that represents the interests of mobile network operators worldwide. More than 750 mobile operators are full members of GSMA, and a further 400 companies in the broader mobile ecosystem are associate members.

Globally there are currently 310 live mobile money services operating in 96 countries, and 171 of those services are in Africa, with 157 in sub-Saharan Africa (SSA).

In 2020, Africa had 562 million registered mobile money (MoMo) accounts, which was an increase of 12 per cent from the previous year. The continent also had 161 million active accounts, representing an 18 per cent increase year-on-year, and making up over half of the 300 million global active accounts.

The GSMA said that in 2020, customers were using their accounts more frequently, as well using them for new and more advanced use cases.

According to the GSMA report: “This suggests that more and more people are moving away from the margins of financial systems and leading increasingly digital lives.”

Financial experts believe that the “increasingly digital lives” by customers across the globe is significantly linked to the Covid-19. There was a dramatic acceleration in mobile transactions during the Covid-19 pandemic as lockdown restrictions limited access to cash and financial institutions; and pushed consumers to turn to digital payments as a safer and more accessible option. The absence of territorial movements pushed most customers to use electronic transactions.

To minimize the economic toll of the pandemic, many national governments distributed monetary support to individuals and businesses. The value of government-to-person payments quadrupled during the pandemic, with the mobile money industry working hand-in-hand with administrations and NGOs to distribute social protection and humanitarian payments.

In Nigeria, the above development struck more chord, as Africa’s largest economy by GDP size saw astronomic increase electronic fund transfers. The Nigerian Interbank Settlement System (NIBSS) informed that the year 2020 saw a 50 per cent growth in transactions by Nigerians effected via the electronic fund transfer (EFT) to N158.1 trillion. This was higher than the N105.2 trillion recorded in 2019. There was also a 77 per cent surge in the total volume of transactions to 2.03 trillion in 2020 from 1.15 billion recorded in the previous year.

However, there are still barriers preventing women (especially in Africa) from accessing and using mobile financial services.

John Giusti, the GSMA’s chief regulatory officer, said, “We see that mobile money is a powerful tool for expanding the financial inclusion of women in low- and middle-income countries.”

Giusti said the 2021 report, however, found that across markets, women are still 33 per cent less likely than men to have a mobile money account.

Globally, registered accounts grew by almost 13 per cent, with over 136 million added in just one year. This growth was two times higher as expected; and exceeded last year’s forecast by 6.4 percentage points.

The GSMA said the fastest growth was in markets where governments provided significant pandemic relief to their citizens. The addition was also assisted by regulators implementing more flexible Know Your Customer (KYC) processes and relaxed onboarding requirements.

Transaction values grew across the board as more money circulated and was cashed-in and cashed-out than ever before. For the first time, the global value of daily transactions exceeded $2 billion, and has more than doubled in value since 2017. The GSMA expects this value to surpass $3 billion a day by the end of 2022.

Overall, Africa had a mobile money transaction value of $495 billion in 2020, almost two-thirds of the global value of $767 billion. Registered accounts on the continent comfortably surpassed the half-billion mark. The Sub-Saharan Africa (SSA) has been at the forefront of the mobile money industry for over a decade, and in 2020 continued to dominate the growth, with about 43 per cent of all new accounts.

By the end of 2020, SSA had 548 million registered accounts, over 150 million of which were active on a monthly basis. Absolute growth was highest in West and East Africa, but Southern Africa grew the fastest at 24 per cent year-on-year.

The GSMA said, in absolute terms, the Middle East and North Africa regions saw the largest addition in registered MoMo accounts over the last five years. This is because of both new and renewed efforts by industry players across the region.

During the year under review, North Africa’s active MoMo accounts increased by 22 per cent to 1 million, while overall registered accounts were up 16 per cent to 14 million.

Other details of the GSMA’s 2021 state of the industry report indicate that, in sub-Saharan Africa, on average, 19 per cent of all monthly active accounts made a bill payment and 13 per cent receive bulk payments. Meanwhile, over 10 per cent made a merchant payment, up from 9 per cent in 2019. However, only 1 per cent of accounts sent or received international remittances.

On remittances, GSMA said there was global boom; and for the first time more than $1 billion was sent and received in the form of remittances every month via mobile money.

“Despite early fears that transactions would decline as people worldwide suffered job losses and income cuts during the pandemic, it remains clear that diasporas continue to support family and friends back home,” the GSMA report said.  As a result, the total value of transactions increased by 65 per cent to an annual total of $12.7 billion in 2020.