EMs to exceed $2trn in mobile money transactions by 2027

By Alex Chiejina

• Africa most active in doubling global mobile money account
• Africa had $836.5bn mobile money transactions in 2022

The overall value of mobile money transactions in emerging nations will reach $2 trillion by 2027, up over $500 billion from 2023, according to a new analysis from Juniper Research, a leading authority on payments. 

The PaaP (Payments-as-a-Platform) model, which permits third parties to deliver products via mobile money apps, is driving the market’s 33 percent growth, the report noted.

According to the report, mobile money providers can lessen their reliance on revenue derived from user fees, such as airtime top-ups and P2P transfers, by implementing a PaaP model. 

It also suggests that providers could look to generate extra income from companies that want to be highlighted on large service platforms, such eCommerce platforms. 

But the report observed that without the mobile money operators having to create extra services themselves, PaaP enables third parties to have greater access to subscribers. 

Additionally, it allows mobile money providers to generate more money and satisfy the increasingly complex consumer needs, stated the Jupiter report.

Over the past five years, the number of active mobile money accounts has doubled globally, mostly attributable to Africa. Although the continent is the main force behind the expansion of mobile money transactions, performance gaps remain. In 2022, 66.3 percent of mobile money transactions took place in Africa.

According to “The State of the Industry Report on Mobile Money 2023,” Africa had $836.5 billion in mobile money transactions that year, a 22 percent increase from 2021. Mobile money transactions increased 13 percent from 2021 to $1,260 billion globally in 2022.

Last year, 69.2 percent of all mobile money transactions worldwide took place in Africa. Out of a total of 65 billion transactions conducted globally (+19%), the continent saw roughly 45 billion transactions (up 21% from 2021).

Additionally, the continent accounted for 48.8 percent of all mobile money accounts worldwide. Out of a total of 1.6 billion accounts globally (+13%), 781 million accounts were discovered in the continent by the end of 2022 (an increase of 17 percent from 2021).

The Juniper research reveals that emerging countries will have 411 million sophisticated MFS (Mobile Financial Services) customers by the year 2027. This 40 percent growth is the result of service providers providing a wider range of products and services, like microloans and microinsurance, in order to meet rising consumer demand. 

The importance of mobile money vendors offering advanced MFS and investing in technologies that support it has increased due to the developing maturity of numerous mobile money marketplaces, growing customer awareness, and wealthy user base.

Cara Malone, a co-author of the research, said: “Vendors must effectively adopt advanced MFS or they will be overtaken by growing competition. The most effective way to do this is by trying something new, such as using the operator’s own data to provide alternative credit rating, which opens a lot more lending prospects.”

In order to effectively retain clients and stave off escalating competition, the research encouraged mobile money companies to use data analytics, noting that vendors can provide end users more specialised services by getting significant data into consumer behaviour and preferences. 

A more individualised solution is made possible by combining this data with fresh third-party services via PaaP, which boosts customer satisfaction and revenue, the report further stated.

In 2021, the total value of the mobile money market stood at $555 billion. The total value of mobile money transactions in emerging markets is expected to exceed $870 billion in 2026, representing growth of almost 60 percent, according to latest reports. 

Mobile money growth is however driven by the transition of mobile money vendors, such as M-PESA, to the PaaP (Payments-as-a-Platform) model which enables mobile money vendors to offer their users access to third-party services such as eCommerce; creating additional revenue streams.

In order to effectively retain clients and stave off escalating competition, the research encouraged mobile money companies to use data analytics. Vendors can provide end users more specialised services by getting significant data into consumer behaviour and preferences. 

A more individualised solution is made possible by combining this data with fresh third-party services via PaaP, which boosts customer satisfaction and revenue, the report stated.