About 1.4-billion people worldwide do not have a bank account, according to GSM Association estimates. When people are excluded from formal financial services such as banks, the ability to be able to transact by using a mobile phone offer them a secure way to send money across borders, save and, in some cases, apply for micro-loans and insurance.
The first mobile money providers emerged in the early 2000s in the Philippines. But the service really took off once it was introduced in Sub-Saharan Africa with M-Pesa, which was created by a collaboration between Vodafone and Safaricom almost 20 years ago.
Sub-Saharan Africa has dominated the global mobile money landscape since 2013, and now boasts twice as many registered accounts as South and East Asia and the Pacific.
According to the GSMA’s 2024 state of the industry report, the region has 835-million registered mobile money accounts, nearly half of the world’s 1.75-billion accounts. Last year, 62-billion transactions worth $912-billion were processed in Sub-Saharan Africa, accounting for two-thirds of the world’s total mobile money transactions.
WHAT IS MOBILE MONEY?
Mobile money is a digital wallet service that allows users to store and exchange money using a basic mobile phone. Provided by mobile network operators or their partners, it doesn’t require a bank account. Users can top up accounts through agents and use it to pay for goods, services or send money.
Mobile banking, on the other hand, involves using a smartphone app to manage a bank account.
– IMF Knowledge Base
Big hitters
According to the GSMA, there are 169 mobile money services in Africa, which is half of the world’s providers. Growth has been driven by West and East Africa, with East Africa accounting for the majority of transactions (61%). This is unsurprising as it is where the mobile money revolution on the continent began.
M-Pesa was one of the first providers in Africa when it launched in Kenya in 2007. It is considered one of Africa’s most successful mobile money services. Its 66.2-million customers in six countries were responsible for 33-billion transactions in the 2023 financial year, according to Vodafone’s latest annual report. These include sending money, paying salaries, receiving grants and topping up airtime.
West Africa accounts for almost one-third of Africa’s total transactions. The number of registered accounts in the region doubled between 2013 and 2023, thanks to Ghana, Nigeria and Senegal, the GSMA says.
Notebook
This story was first published in The Outlier newsletter. Sign up