Mobile money becomes key global economic driver

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 20 Mar 2024
Sub-Saharan Africa accounted for over 70% of the total growth in registered mobile money accounts in 2023.
Sub-Saharan Africa accounted for over 70% of the total growth in registered mobile money accounts in 2023.

The value of global mobile money transactions increased 14% last year, with 1.75 billion registered accounts processing $1.4 trillion annually.

This is based on insights from the 12th edition of the GSM Association’s (GSMA's) annual State of the Industry Report on Mobile Money.

The report is published annually by the GSMA Mobile Money Programme and funded by the Bill and Melinda Gates Foundation.

It points out Africa’s mobile money market is starting to mature as the use cases become more sophisticated and providers offer adjacent financial products, like credit, savings and insurance.

Additionally, the report indicates mobile money is fuelling economic growth and expansion of financial services in Sub-Saharan Africa.

The 2024 edition shows that between 2013 and 2022, countries with mobile money services saw a $600 billion higher gross domestic product (GDP) than those without, equivalent to mobile money increasing GDP by around 1.5%.

According to the report, global registered mobile money accounts reached 1.75 billion in 2023, a 12% increase from 2022.

“Although the year-on-year growth rate of registered mobile money accounts is slowing (from 15% in 2022 and 19% in 2021), this reflects the start of the industry’s maturation.

“Growth has been pronounced in Sub-Saharan Africa, where the share of registered accounts has increased for two consecutive years to 47% in 2023, the highest since 2019. Sub-Saharan Africa accounted for over 70% of the total growth in registered accounts in 2023, with South Asia contributing a fifth.”

It further states that the diversification of use cases is empowering the underserved, including women and rural populations, to save money through mobile money accounts.

Mobile money providers tracking disaggregated data found a 98% increase in the cumulative number of unique female customers saving via mobile money, between September 2022 and June 2023.

Despite these gains, the GSMA report notes significant barriers to accessing mobile money remain, including low mobile ownership, perceived relevance, digital skills, social norms and trust levels. The lack of mobile ownership remains the biggest hurdle, it states.

While the total number of registered mobile money accounts stands at 1.75 billion, a sizeable gender gap remains, it states. “Globally, women are 7% less likely than men to own a phone. This gap in mobile ownership exists in all survey countries, except Kenya.

“Beyond addressing individual challenges, an enabling regulatory landscape is crucial for boosting global financial inclusion and mobile money uptake.

“Taxation remains an important regulatory challenge for many mobile money services. Mobile money taxation can be a convenient revenue-earning opportunity for many governments in Sub-Saharan Africa. However, countries including Ghana and Tanzania have experienced the negative effects of taxing mobile money transactions.”

Ashley Olson Onyango, head of financial inclusion and agritech at GSMA, comments: “Mobile money has demonstrated its potential to transform economies and societies, driving financial inclusion and sustainable development worldwide. As the industry has started to mature, it is also clear that mobile money offers a sound commercial proposition.

“Between 2022 and 2023, the average revenue per user rose 40%, validating the recent investment the industry has seen. To ensure mobile money remains safe, accessible and affordable, there is a clear need for governments and regulators to work with financial service providers to launch financial literacy programmes that can empower underserved populations and improve their financial decision-making.”