The value of mobile money transaction in Nigeria and other West African countries peaked at $130billion last year with a total of 163million registered accounts, the Global System for Mobile Communications Association (GSMA) said at the weekend.
The group said mobile money has made a huge inroad in digital transaction, stating that currently, there are 1.4billion registered mobile money accounts with 372million active accounts; transaction volume of 37.1billion with $690billion transaction value, according to its latest State of the Industry Report on Mobile Money 2019, released at the weekend.
GSMA said a mobile money service includes transferring money and making and receiving payments using the mobile phone; the service must be available to the unbanked, e.g. people who do not have access to a formal account at a financial institution; the service must offer a network of physical transactional points which can include agents, outside of bank branches and ATMs, that make the service widely accessible to everyone; mobile banking or payment services (such as Apple Pay and Google Wallet) that offer the mobile phone as just another channel to access a traditional banking product are not included; and payment services linked to a traditional banking product or credit card, such as Apple Pay and Google Wallet, are not included.
According to the report, West Africa has 56 million active accounts with 4.8billion transaction volume. It said sub-Saharan Africa has 469 million registered users with 181million active accounts; 23.8billion transaction volume with $456.3billion transaction value.
The group said East Africa had 249million registered accounts, 102million active accounts, 17.1billion transaction volume with $293.4billion transaction value.
Central Africa has 48million registered mobile money accounts, 20million active accounts, 1.8billion transaction value and $30.4billion transaction value while Southern Africa has 9million registered mobile money accounts, 3million active accounts, 16.5million transaction volume with $2.5billion transaction value.
GSMA said more value is circulating in the mobile money system than exiting, adding that another industry first – the total value in circulation (P2P and merchant payments) reached $22 billion in December 2019, more than doubling over the past two years and significantly surpassing the total value of outgoing transactions ($18 billion).
It said the industry has clearly zeroed in on what keeps value circulating. For example, it explained that by creating more compelling value propositions for micro, small and medium enterprises (MSMEs) with business management tools like customer analytics and inventory management, and offering credit lines to agents and merchants.
It added that the industry is increasingly becoming interoperable and integrated, stressing that interoperability with banks and account-to account (A2A) interoperability is meeting the needs of entirely new customer segments, including traditionally underserved and cash-reliant customers.
“Mobile money-enabled international remittances have flourished as the industry has become more integrated with international financial system players. Integration via APIs with organisations ranging from government agencies to utility companies, online businesses and local entrepreneurs is also on the rise,” the group said.
The group said regulatory landscape is evolving, arguing that regulation that enables low-cost services for the financially excluded has been crucial to the success of mobile money, and there is a clear correlation between high mobile money adoption rates and enabling regulatory environments. “However, certain policy interventions, such as sector-specific taxation and data localisation requirements, are putting pressure on the industry and may have long-term negative impacts on financial inclusion gains, innovation and achieving the Sustainable Development Goals (SDGs),” it said.
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