State of the Industry Report on Mobile Money 2018 - GSMA
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State of the Industry Report on Mobile Money 2018 Copyright © 2019 GSM Association
2018 State of the Industry Report on Mobile Money
Mobile Money
The GSMA represents the interests of mobile operators The GSMA’s Mobile Money programme works to
worldwide, uniting more than 750 operators with over accelerate the development of the mobile money
350 companies in the broader mobile ecosystem, ecosystem for the underserved.
including handset and device makers, software companies,
equipment providers and internet companies, as well as For more information, please contact us:
organisations in adjacent industry sectors. The GSMA also
produces the industry-leading MWC events held annually in Web: www.gsma.com/mobilemoney
Barcelona, Los Angeles and Shanghai, as well as the Mobile Twitter: @GSMAMobileMoney
360 Series of regional conferences. Email: mobilemoney@gsma.com
For more information, please visit the GSMA corporate
website at www.gsma.com
Follow the GSMA on Twitter: @GSMA
Lead author:
Francesco Pasti
Senior Manager, Mobile Money Services, GSMA,
with the support of the wider GSMA Mobile Money team
THE MOBILE MONEY PROGRAMME IS SUPPORTED BY THE BILL & MELINDA GATES FOUNDATION,
THE MASTERCARD FOUNDATION, AND OMIDYAR NETWORK
2018 State of the Industry Report on Mobile Money Contents FOREWORD 2 EXECUTIVE SUMMARY 4 MOBILE MONEY IN 2018 7 THE BIG PICTURE 8 2018 MOBILE MONEY HIGHLIGHTS 12 REGIONAL GROWTH 13 REACHING THE UNDERSERVED THROUGH 14 INNOVATION FOUR TRENDS SHAPING THE MOBILE MONEY 18 INDUSTRY CONCLUSION 34
2018 State of the Industry Report on Mobile Money Foreword 2
2018 State of the Industry Report on Mobile Money
Foreword
For over a decade, mobile money has been party products and services to suit customers
transforming access to financial services with diverse needs. This signals the start of
around the world. The scale of mobile money a major shift in the mobile money industry,
continues to grow, with more than 866 which will promote digitisation more broadly:
million registered accounts in 90 countries mobile money customers will not just have
and $1.3 billion transacted every day. The access to an account, but rather to a full suite
progress, challenges and most ground- of services that are relevant to their daily
breaking industry trends are explored in this lives, encouraging them to keep their funds in
year’s flagship report from the GSMA’s Mobile digital form and building resilience to financial
Money team. shocks.
For the world’s most vulnerable, especially Now more than ever, mobile’s unparalleled
displaced persons and women, the benefits global scale provides a tremendous
of mobile money are real and far reaching. opportunity to reach the 1.7 billion people
Fifty-five per cent of surveyed mobile who remain financially excluded. I am pleased
money providers have now partnered to have been appointed to the United Nations
with humanitarian organisations, an Secretary-General's Task Force on Digital
initiative closely supported by our Mobile Financing of the Sustainable Development
for Humanitarian Innovation programme. Goals to harness this potential, and I look
In August 2018, our Connected Women forward to working closely with fellow Task
team released the Gender Analysis and Force members to unleash the power of
Identification Toolkit (GAIT), a machine technology and digital financing in all corners
learning algorithm that analyses mobile of the world.
usage patterns, to assist operators in reaching
I hope that you enjoy exploring the 2018
underserved female customers with relevant
State of the Industry Report on Mobile
and tailored products and services.
Money, which has been produced with the
We were also honoured to launch the generous support of the Bill & Melinda Gates
GSMA Mobile Money Certification in April Foundation, The Mastercard Foundation and
2018, demonstrating the mobile industry’s Omidyar Network.
commitment to bringing safe, transparent,
and resilient financial services to mobile
money users around the world. To date,
nine providers across three continents have
successfully certified, collectively covering
over 133 million mobile money accounts.
The mobile money industry is now fast-
evolving against a backdrop of increasing Mats Granryd
internet access and smartphone adoption. Director General, GSMA
Successful providers are moving towards a
'payments as a platform approach', expanding
their value proposition to a full range of third-
3
2018 State of the Industry Report on Mobile Money Executive Summary 4
2018 State of the Industry Report on Mobile Money
Executive Summary
Now processing over $1.3 billion a day, the
mobile money industry added a record
143 million registered customers in 2018.
Providers are attracting new investments An enhanced customer experience. 2018 saw
and forming strategic partnerships, a dramatic increase in smartphone adoption
leveraging data and innovative financial in emerging markets, unlocking access
technologies, and developing robust and to a broader customer base and allowing
interoperable payments systems to diversify providers to offer a wider range of financial
their revenue, product offerings and products and services through user-friendly
customer base. apps. Interoperability also continued to be
a strategic priority for the industry, not only
In 2018, following a decade of incredible
to increase the utility of mobile money for
growth, the mobile money industry is still
users, but also to allow increasingly important
getting the fundamentals right. Mobile money
use cases to scale up faster. The main
accounts continue to provide a gateway to
drivers of digital growth in 2018 were bulk
life-enhancing services, such as healthcare,
disbursements and bill payments — a signal
education, financial services, employment
that mobile money providers are becoming
and social protections, which are reaching
strong partners for enterprises.
customers who have traditionally been
underserved by the financial system. Many Diversification of the financial services
industry players have reached scale, and landscape. While large MNO groups still
account registrations, activity rates and dominate Africa’s mobile money ecosystem,
transaction values continue to grow steadily. in Asia, fintechs and tech giants have entered
the payments space and developed a
While cash-in and cash-out transactions still
range of customer-centric use cases, from
represented the majority of mobile money
transportation to food, medical and financial
flows in 2018, digital transactions grew at
services, and amassed a vast number of
twice the rate, driven largely by bill payments
partners, including financial institutions.
and bulk disbursements. Successful providers
Mobile money providers in both Asia and
are now looking to strengthen their value
Latin America, including fintech players,
proposition with a full suite of use cases
are driving growth in the mobile payment
that serve diverse customer needs. This shift
ecosystem, and expanding from e-commerce
towards a 'payments as a platform' approach
to offer financial services such as credit.
is at the heart of the industry’s new direction.
This year’s State of the Industry Report looks
at how providers are navigating this dynamic
and shifting ecosystem, which was shaped by
four key trends in 2018:
5
2018 State of the Industry Report on Mobile Money
Increasingly complex regulation. As the number countries, Nigeria, Ethiopia and Egypt, which we
of players in the digital financial services ecosystem expect to spark a wave of adoption which could
grows exponentially, regulation is becoming lead to over 110 million new mobile money accounts
increasingly complex. Five main themes dominated in the next five years.
the mobile money regulatory landscape in
Mobile money continues to play a vital role in
2018: taxation, KYC requirements, cross-border
financial inclusion. Globally, around 1.7 billion
remittances, national financial inclusion strategies
people still lack access to safe, reliable and
and data protection. These developments call for a
convenient financial services.1 However, 31 emerging
more nuanced evaluation of regulatory frameworks
markets have seen an impressive increase in
and collaboration between providers and regulators
financial inclusion rates, which can be attributed to
to achieve the mutual aim of expanding mobile
simultaneous growth in active mobile money use.
money services.
Although much work remains to be done in closing
Expansion of the mobile money value proposition.
the mobile money gender gap, there is evidence
In our 2018 Global Adoption Survey, close to
from the 2017 Global Findex that the mobile
80 per cent of providers reported that most of
money gender gap has narrowed in 17 countries
their revenues are driven by customer fees. Many
in Sub-Saharan Africa and in one country in Latin
providers are now seeking to strengthen their
America (Bolivia). Our Global Adoption Survey data
value proposition with a 'payments as a platform'
revealed a strong positive correlation between the
model. This connects consumers and businesses
percentage of female agents in a provider’s network
with a range of third-party services to meet their
and female customers.
evolving needs, from enterprise solutions for micro-,
small- and medium-sized enterprises (MSMEs) to In this report, we take a closer look at these trends
e-commerce, credit, savings and insurance. and unfolding industry stories. The full findings of
this year’s State of the Industry Report on Mobile
It was not only these trends that captured our
Money are based on the analysis of data collected
attention in 2018. Other compelling developments
through the GSMA’s Annual Global Adoption Survey.
include reforms in Africa’s three most populated
1. World Bank Group (2018). The Global Findex Database 2017.
6
2018 State of the Industry Report on Mobile Money
MOBILE MONEY IN 2018
272
MOBILE MONEY DEPLOYMENTS
866m
90
ARE LIVE IN
REGISTERED MOBILE MONEY ACCOUNTS
COUNTRIES 20% increase from 2017
62 MOBILE MONEY
DEPLOYMENTS
HAVE MORE THAN
compared to 54 in 2017 and 13 in 2013
1m 90-DAY
ACTIVE
ACCOUNTS
$1.3bn
A TYPICAL ACTIVE MOBILE
MONEY CUSTOMER MOVES
$206
PER MONTH
processed daily
by the mobile money industry
54% OF THE COMBINED
ADULT POPULATION OF
DIGITAL TRANSACTION
VALUES
GHANA, CÔTE D’IVOIRE,
BENIN AND SENEGAL Grew at
x2
use mobile money on an active basis
more than
TWICE the
ASIA
90m
rate of
cash-in/
cash-out
NEW REGISTERED ACCOUNTS values
31% increase from 2017
7
2018 State of the Industry Report on Mobile Money THE BIG PICTURE: Availability, adoption, accessibility and usage 8
2018 State of the Industry Report on Mobile Money
THE BIG PICTURE:
Availability, adoption,
accessibility and usage
In its second decade, mobile money
continues to reach new heights. Many
industry players have scaled,2 growth
in transactions and accounts is steady,
and innovative solutions are being
implemented to reach customers who
have traditionally been underserved by
the financial system.
In 2018, the mobile money industry added increased by more than 10 per cent. While
another 143 million registered customers activity rates in Sub-Saharan Africa remain
globally with the total number of accounts stable at 36.8 per cent, largely unchanged
reaching 866 million — a 20 per cent year- from 2017, the region added over 17.5 million
on-year increase. As in 2017, most of this new active accounts in 2018. In 13 African
growth came from Asia, where 90 million new countries,4 over a third of adults are active
accounts were opened. East Asia and Pacific mobile money users.
experienced the highest year-on-year account
Transaction values increased by 17 per cent
growth at 38 per cent, and the region now
in 2018, with 272 live deployments in 90
represents 11 per cent of registered accounts
countries transacting $40.8 billion in the
globally (Figure 1).
month of December. The industry is therefore
Activity rates are stable at the global level: now processing over $1.3 billion per day, and
34.5 per cent of the world’s registered while cash-in and cash-out transactions still
accounts are now active,3 up from 33.9 per represent the majority of mobile money flows,
cent in 2017. Activity rates are once again digital transactions5 grew at more than twice
highest in Latin America and the Caribbean the rate driven largely by bill payments and
(48.5 per cent), while the biggest increases bulk disbursements. For the average active
are in Asia (East Asia and Pacific and South mobile money customer, this equates to 12
Asia) where activity rates in several countries transactions a month worth $206.
2. Scale implies onboarding and activating a large proportion of a provider’s customer base and increasing the number of transactions per customer.
3. An ‘active’ mobile money account is one that has been used to conduct at least one transaction during a 90-day period.
4. Benin, Botswana, Burkina Faso, Côte d’Ivoire, Gabon, Ghana, Kenya, Lesotho, Rwanda, Swaziland, Tanzania, Uganda and Zimbabwe.
5. Digital transactions are transactions which enter, leave or circulate the mobile money ecosystem in digital form,
rather than through a cash conversion (cash-in or cash-out).
92018 State of the Industry Report on Mobile Money
Figure 1. Global spread of registered mobile money customers, December 20186
1.4%
Europe
& Central Asia
5.6%
MENA
11.0%
East Asia & Pacific
33.2%
3.1% South Asia
Latin America
& the Caribbean
45.6%
Sub-Saharan
Africa
The potential of India’s payments banks
While almost 80 per cent of India’s population Three years on, the sector has yet to show its
is now banked,7 the country has one of the true potential. Actions including a ban on new
world’s highest inactivity rates, with nearly customer registration, the imposition of certain
half of banked customers (48 per cent) yet to penalties, slow deposit collection and delayed
perform a withdrawal or transaction.8 This is launches were exacerbated when customer
the context in which payments banks began onboarding also became more complex. A
operating in 2016, and today there are seven in recent Supreme Court ruling has created
operation, three of which are MNO-led. uncertainty around the extent to which the
private sector may continue to use Aadhaar,
Payments banks are financial institutions that
India’s digital identification system, to link
accept small-scale deposits (up to Rs1 lakh, or
accounts.
about $1,407 each), but are not allowed to lend.
They began operating after the central bank, As a financial services platform, payments
the Reserve Bank of India (RBI), granted in- banks could re-bundle a host of innovative
principle payments bank licences to introduce third-party services and leverage the services
unbanked and underserved customers to more that traditional banks offer while also attracting
formal channels. unbanked customers, allowing India’s payments
banks to live up to their true potential.
6. Only countries with live mobile money services are represented.
7. World Bank Group (2018). The Global Findex Database 2017.
8. Ibid.
102018 State of the Industry Report on Mobile Money
Unlocking future growth: Africa’s mobile money sleeping giants
In a growing number of countries in Sub- and market entry. The unfavourable market
Saharan Africa, a traditional stronghold of conditions in these countries are reflected
mobile money, over 60 per cent of the adult in their low scores on the GSMA’s Mobile
population has a mobile money account. Money Regulatory Index (see page 29). These
While providers in these countries are still scores are due to factors such as restrictive
driving growth in registered accounts, rates or unclear legal frameworks, lack of flexibility
will slow as the majority of the population and clarity around innovation and investment,
gains access to mobile money. However, and disproportionate Know Your Customer
there is still a tremendous opportunity to (KYC) requirements.11
unlock growth and increase financial inclusion
But change is coming. In 2018, regulatory
in the continent’s mobile money sleeping
reforms were introduced in Nigeria12 and
giants: Nigeria, Ethiopia and Egypt. Home
Egypt13 to harness the potential of mobile
to a combined adult population of over
money to drive financial inclusion, and
242 million,9 Africa’s three most populated
reforms and an ambitious financial inclusion
countries have had limited availability of
strategy in Ethiopia have been attracting the
mobile money services and low rates of
attention of both MNOs and non-MNO-led
financial inclusion (Figure 2).10
players.
The reasons for this vary. In Nigeria and
Egypt, regulatory frameworks have allowed Despite the challenges to overcome, we
few players to offer mobile money services, anticipate that these reforms could spark a
resulting in lower levels of investment and wave of adoption in these three countries —
fewer innovative products and services. In over 110 million new mobile money accounts14
Ethiopia, a strictly regulated telco, restrictions in the next five years — and help to achieve
on competition, lack of internet connectivity, the financial inclusion targets set out in
and low levels of consumer trust and financial their respective national financial inclusion
literacy have created barriers to uptake strategies.
Figure 2. Africa’s mobile money sleeping giants
Egypt Nigeria Ethiopia
Adult population: 67m Adult population: 111m Adult population: 64m
Adults with Adults with Adults with
an account: 32.8% an account: 39.7% an account: 34.8%
Mobile Money Mobile Money Mobile Money
Regulatory 67.21 Regulatory 65.67 Regulatory 65.83
Index Score: Index Score: Index Score:
Across Egypt,
Ethiopia and
Nigeria, over 110m
9. GSMA Intelligence and World Bank. mobile money
10. World Bank Group (2018). The Global Findex Database 2017.
11. This refers to the Authorisation, KYC and Infrastructure and Investment Environment
accounts can be
dimensions of the Mobile Money Regulatory Index. unlocked in the
12. In October 2018, The Central Bank of Nigeria officially proposed the creation of Payment Service Banks.
13. Alliance for Financial Inclusion (2018) Financial inclusion through digital financial services and fintech:
next five years
the case of Egypt.
14. GSMA analysis
112018 State of the Industry Report on Mobile Money
MOBILE MONEY HIGHLIGHTS IN 2018
MARCH APRIL
2018 saw efforts to pursue
new investments and CONSUMER
strategic partnerships, to PROTECTION.
leverage data and innovative INVESTMENT. GSMA launches the GSMA Mobile
Telenor Group and Ant Money Certification scheme. Over
financial technologies, the course of the year, nine mobile
Financial enter a strategic
and to develop robust and partnership to deliver inclusive money providers become certified,
interoperable payments financial services in Pakistan. collectively covering over 133
million customer accounts.
systems to support a range
of use cases and financial
products.
SEPTEMBER APRIL APRIL
STRATEGIC
INVESTMENT. INVESTMENT. PARTNERSHIP.
American investment Ant Financial invests in PayPal, Safaricom and TransferTo
conglomerate Berkshire Bangladesh’s bKash to expand announce a collaboration
Hathaway acquires a four per the capabilities of the platform enabling M-Pesa users in Kenya
cent stake in Paytm, India’s to ultimately boost financial to securely transfer funds
largest digital payments inclusion. between PayPal and M-Pesa
company. accounts.
SEPTEMBER OCTOBER NOVEMBER
REGIONAL
INNOVATIVE REGULATION. INTEROPERABILITY.
USE CASES. The Central Bank of Nigeria Orange and MTN launch a
issues guidelines for the pan-African mobile money
84.6 per cent of Ghanaian licensing, regulation and
investors buy shares for MTN interoperability venture, Mowali, to
operations of payment service scale up mobile financial services
Ghana’s Initial Public Offer banks, enabling mobile
(IPO) using the MTN Mobile across Africa.
operators to lead financial
Money Portal. inclusion efforts.
DECEMBER NOVEMBER NOVEMBER
STRATEGIC
INVESTMENT. INTERNATIONAL PARTNERSHIP.
Econet Wireless demerges and COMMITMENT. Safaricom and Western Union
lists Cassava Smartech (which The United Nations announces partner to allow M-Pesa users to
includes its EcoCash mobile money the launch of a global task transfer money to and from 200
operation) separately on the force on Digital Financing of countries. Kenya’s Family Bank Ltd
Zimbabwe Stock Exchange (ZSE) the Sustainable Development and fintech SimbaPay also partner
valued at around $3.9 billion soon Goals, with the GSMA as a to enable M-Pesa customers in
after listing. member. Kenya to send money to
WeChat users
in China.
122018 State of the Industry Report on Mobile Money
REGIONAL GROWTH IN 2018
NUMBER OF AS OF REGISTERED ACTIVE 90-DAY TRANSACTION VALUE
DEPLOYMENTS DECEMBER ACCOUNTS ACCOUNTS VOLUME US$
GLOBAL 2017 722.9m 244.9m 2.1bn 34.9bn
272
(TOTAL)
YEAR-ON-YEAR
GROWTH 19.8% 21.9% 14.4% 16.8%
2018 866.2m 298.7m 2.4bn 40.8bn
SUB-SAHARAN 2017 348.3m 128.3m 1.5bn 23.3bn
AFRICA
YEAR-ON-YEAR
132 GROWTH 13.6% 13.6% 11.8% 15.3%
2018 395.7m 145.8m 1.7bn 26.8bn
SOUTH ASIA 2017 223.7m 63.9m 447.5m 7.5bn
YEAR-ON-YEAR
43 GROWTH 28.5% 39.9% 26.3% 17.9%
2018 287.6m 89.3m 565.1m 8.8bn
EAST ASIA 2017 68.5m 21.1m 74.9m 2.7bn
& PACIFIC
YEAR-ON-YEAR
41 GROWTH 38% 41.5% 38.3% 35.7%
2018 94.6m 29.8m 103.6m 3.7bn
LATIN AMERICA & 2017 23.5m 11.6m 66.4m 1.0bn
THE CARIBBEAN
YEAR-ON-YEAR
28 GROWTH 14.7% 10.3% -29.9% -7.9%
2018 27m 13.1m 46.5m 945m
MIDDLE EAST & 2017 47.3m 18.0m 39.7m 376.2m
NORTH AFRICA
YEAR-ON-YEAR
20 GROWTH 3.4% 3.5% 5.6% 25.7%
2018 48.9m 18.6m 41.0m 473.0m
132018 State of the Industry Report on Mobile Money Reaching the underserved through innovation 14
2018 State of the Industry Report on Mobile Money
Reaching the underserved
through innovation
Throughout 2018, mobile money
continued to play a critical role in
enhancing financial inclusion in emerging
markets.
Thirty-one markets saw an impressive inclusion has extended beyond Sub-Saharan
increase of more than five percentage points Africa.
in account ownership at financial institutions
Countries where mobile money’s contribution
between 2014 and 2017 (Figure 3), which can
to the overall growth of financial accounts is
be attributed to the simultaneous growth in
not as significant tend to have a lower than
active mobile money use. In fact, in almost
average Regulatory Index score (see page 29).
half these markets, growth in active mobile
This highlights the importance of establishing
money use exceeded eight percentage points,
a more level regulatory playing field which
and a third of the 31 countries analysed were
allows for innovative market-led solutions to
in either Asia or Latin America, demonstrating
increase financial inclusion.
that the impact of mobile money on financial
Figure 3. The contribution of mobile money to financial inclusion
30
a proportion of adult population, 2014–2017 (percentage points)
Growth of active 90-day mobile money accounts as
25
In these countries, mobile money
has been the main driver of financial
inclusion growth
20
15
10
5
0
0 5 10 15 20 25 30 35 40 45
Growth of all accounts as a proportion of adult population, 2014-2017 (percentage points)
= Country
152018 State of the Industry Report on Mobile Money
For populations traditionally excluded from the formal financial system — women, the rural poor and
displaced persons — the spread of mobile money accounts is providing a gateway to transformative services
including healthcare, education, financial services, employment and social protections, and bringing more
people online than ever before.
Rural market penetration and the Ghana, Kenya and Zambia, the share of adults
digitisation of agricultural value chains receiving agricultural payments is about twice
is a priority for a growing number of mobile the average for developing economies, and
money providers. While in developing about 40 per cent receive these payments
economies about 15 per cent of adults receive into an account, in most cases a mobile
payments from the sale of agricultural money account.15 Over 50 per cent of survey
products, the vast majority of these payments respondents reported having a product
are made in cash, which can be risky, specifically targeted to rural customers or
inefficient and inconvenient to collect. In plan to launch one in 2019.
Mobile money is increasingly a vehicle services to replace in-kind aid with direct
for reaching forcibly displaced persons, cash transfers. Our survey found that over
including refugees. Over 135 million16 55 per cent of mobile providers in affected
people required humanitarian assistance countries are partnering with humanitarian
and protection in 2018. To respond to these organisations, often to facilitate bulk
demands, humanitarian organisations are disbursements or provide access to basic
seeking to deliver services more efficiently financial services.
and effectively and turning to digital financial
Closing the gender gap in financial men to use mobile money17 and 10 per cent
inclusion will deliver broad benefits to less likely to own a mobile phone.18
individuals, societies and economies, and
Our 2018 Global Adoption Survey data
represents a considerable commercial
showed that providers are leveraging their
opportunity for mobile operators. There is
core assets to address the persistent gender
evidence that the mobile money gender gap
gap in mobile ownership and use, with
is narrowing: according to the 2017 Global
female agents emerging as powerful assets
Findex, between 2014 and 2017, the gender
for reaching female customers. For those
gap closed in 17 countries in Sub-Saharan
respondents providing data on both the
Africa and in one country in Latin America
percentage of their female agent base and
(Bolivia). However, much work remains to be
female customer base, we found a strong
done as women in low- and middle-income
positive correlation19 between these two
countries are still 33 per cent less likely than
variables.
15. World Bank Group (2018). The Global Findex Database 2017.
16. UNOCHA (2018). Global Humanitarian Overview.
17. World Bank Group (2018). The Global Findex Database 2017.
18. GSMA (2018). The Mobile Gender Gap Report 2018.
19. +0.7 on the Pearson Product-Moment Correlation Coefficient. If the value of r is close to +1, this indicates a strong positive correlation. This was among survey re-
spondents based in East Asia and Pacific, Sub-Saharan Africa, Latin America and the Caribbean, and South Asia, who answered both questions on their registered
female customer base and percentage of female agents.
162018 State of the Industry Report on Mobile Money
Predicting the gender of mobile
subscribers using machine learning
Understanding the nature and scale of the predict the gender of its subscribers. By training
mobile gender gap is a prerequisite for closing the algorithm on a small but accurately gender-
it, but a widespread absence of accurate tagged sample of a customer base, operators
gender-disaggregated data is a consistent can see usage patterns by gender and identify
barrier to measuring and evaluating mobile the gender of each of its subscribers with little
ownership and mobile money use. This limits need for expensive primary research.
the ability of operators to target underserved
Once an operator has implemented GAIT across
female customers with effective, relevant and
its subscriber base, the gender estimates can
tailored products and services.
be applied to mobile money customers at an
To address this issue, the GSMA Connected individual subscriber level. In Bangladesh, a
Women programme, in conjunction with GAIT pilot achieved 84.5 per cent accuracy in
Dalberg Data Insights, developed the Gender gender prediction. Figure 4 below illustrates
Analysis and Identification Toolkit (GAIT),20 how mobile usage differed between male and
a machine learning algorithm that analyses female subscribers for two key indicators.
mobile usage patterns and allows operators to
Figure 4. Key gender-disaggregated mobile usage indicators from the GAIT pilot in Bangladesh
Average duration of incoming calls Number of distinct cell towers visited
by subscriber gender by subscriber gender
0.10- 0.08-
0.07-
Proportion of subscribers
Proportion of subscribers
0.08-
0.06-
0.05-
0.06-
0.04-
0.04- 0.03-
0.02-
0.02-
0.01-
0.00- 0.00-
0 100 200 300 400 500 600
Duration (seconds) Number of towers
Male customers Female customers Overlap between male and female customers
20. To access the GAIT toolkit and full technical documentation, see: “The GSMA’s Gender Analysis and Identification Toolkit (GAIT)”.
172018 State of the Industry Report on Mobile Money Four trends shaping the mobile money industry 18
2018 State of the Industry Report on Mobile Money
Four trends shaping the mobile
money industry
Mobile money is on the cusp of a
transformation. Today, providers are
navigating a dynamic and shifting
ecosystem shaped by four key trends:
an enhanced customer experience;
diversification of the financial services
ecosystem; increasingly complex
regulation; and the expansion of the
mobile money value proposition.
1 An enhanced customer experience
While cash-in and cash-out transactions (based mainly in Latin America), which can
still represent the majority of mobile money have close to 30 per cent of their active
flows in 2018 and grew by 11 per cent year customer base receiving salaries digitally
on year, digital transaction values grew through mobile money.
more than twice as fast (24 per cent).
Meanwhile, mobile money providers
The main drivers of digital growth in 2018 offering bill payments are connected to 102
were bulk disbursements, which grew by 29 companies on average. Bill payments are
per cent, and bill payments, which grew by also an effective way to digitise government
41 per cent — a signal that mobile money payments and increase revenues. However,
providers are becoming strong partners for for our survey respondents, just over 17 per
enterprises (Figure 5). Around 68 per cent cent of all bill payments in 2018 were directed
of all bulk disbursements are originated by to government agencies. The opportunity is
a business and, on average, every mobile ripe for governments to follow the lead of
money provider performing business-to- private sector players in digitising payments
person (B2P) disbursements is connected to and revenue collection, to benefit from the
237 organisations. This number of connected transparency, efficiency and profitability that
organisations can be as high as 4,000 to mobile money delivers.
6,000 for the best-performing providers
192018 State of the Industry Report on Mobile Money
The agent distribution network, which has in data collection and analytics, e-learning and
been vital to the growth of the mobile money technologies, including online dashboards,
industry over the last decade, shows no sign mobile apps, and conversational interfaces.
of diminishing.21 In 2018, the global number of In addition to enhancing user experience
registered mobile money agents grew 18 per and enabling greater digital inclusion, these
cent to reach 6.6 million, 57 per cent of whom new services help to streamline operational
are active on a monthly basis. processes by upgrading agent onboarding
and training, and enhancing agent monitoring
The role of the agent network is evolving
and engagement.
to support adjacent service offerings. An
increasing number of providers are investing
Figure 5. An overview of the mobile money ecosystem, December 2018
Incoming Circulating Outgoing
transactions value transactions
2.1%
1.3% 10.8% 0.9% 7.6%
16.4% 4.5%
Total Value Total Value Total Value 17.0%
9.1%
$16.1 bn $11.1 bn $13.6 bn
73.2%
89.2% 67.9%
International International
Bank-to-mobile Merchant payments Airtime top-ups
remittances remittances
Bulk disbursements Cash-in P2P transfers Off-net transfers Bill payments
Mobile-to-bank Cash-out
A strategic focus on interoperability
Account-to-account (A2A) interoperability, between institutions), but also to enable
which gives users the ability to transfer increasingly important use cases, such as bulk
between customer accounts held with disbursements and bill payments, to scale up
different mobile money providers and other faster.
financial system players, continued to scale in
Providers in several key markets have
2018.
expanded interoperability use cases, including
To lower barriers to access, mobile money in Kenya and Ghana, bringing the total
providers must continue to develop robust number of markets that enable person-
interoperable payments systems that bridge to-person (P2P) transactions between
the gap between banked and unbanked mobile money deployments to nineteen. In
comparison, in 2013, this was only possible in
consumers and accelerate financial inclusion.
one market. Overall, off-net P2P transaction
Interoperability continues to be a strategic
volumes more than doubled from 2017 to
priority for the industry, not only to increase 2018, and in interoperable markets, on-net
the utility of mobile money for users (by transaction volumes did not decline.
enabling the seamless movement of value
21. Juma. J. and Wasunna. N. (2018). Distribution 2.0: The future of mobile money agent distribution networks. GSMA.
202018 State of the Industry Report on Mobile Money
Mobile money-to-bank account interoperability However, innovative solutions will be needed to
has continued to grow significantly, increasing integrate mobile money providers with the broader
by 47 per cent year on year in 2018. On average, financial ecosystem. There are an increasing number
mobile money providers with bank integrations of options around central switching infrastructure
are connected to 10 banks, which has dramatically for the industry to enable nascent use cases to
increased volumes moving between mobile money scale, including merchant payments and efficient
and banking systems. Whereas a few years ago connections to domestic and international financial
flows into the mobile money ecosystem vastly system players.
outweighed those going out, today they are more
However, much of the existing bank-focused
balanced: a bank can now help large numbers
infrastructure is not optimal for mobile money. In an
of MSMEs with mobile money accounts to move
effort to solve this, MTN Group and Orange Group
money out of the system, for example, to save or
launched Mowali in 2018. Mowali aims to act as an
pay suppliers.
open industry utility to facilitate interoperability
Interoperability continues to see strong growth as and provide the optimal technical, commercial
the industry matures into a multi-sided financial and governance environments in which the mobile
system offering a suite of use cases and products. money industry can continue to thrive.
Expanding regional
interoperability through Mowali
In 2018, with the support of the GSMA, MTN to lower-income customers. Additionally, by
and Orange launched a joint venture to enable creating a common mobile money acceptance
interoperable payments across Africa. Known brand, and with the potential to provide one
as Mowali (‘mobile wallet interoperability’), the connection for all mobile money providers,
service is open to any mobile money provider banks, merchants and other digital service
in Africa, as well as to banks, money transfer financial providers to reach the 396 million
operators and other financial services providers. mobile money accounts across Africa, Mowali
aims to lay the foundation for the future of the
Built on top of the Bill & Melinda Gates
mobile money ecosystem.
Foundation’s open-source platform Mojaloop,
Mowali offers an industry-owned and industry- As of early 2019, Mowali will be available to all
governed payments hub that is technically and MTN and Orange mobile money customers in
commercially designed specifically for mobile 22 of Sub-Saharan Africa’s 46 markets, with
money. With its pan-African footprint allowing more mobile money providers expected to join
for economies of scale and a cost-recovery in the next year.
commercial model, Mowali has the potential
to drive down the prices of services offered
212018 State of the Industry Report on Mobile Money
The dramatic rise in smartphone adoption
The disruptive nature of smartphones has smartphone opportunity, more and more
already transformed service models in the providers are offering apps to perform
communications, entertainment and transport transactions. The total number of customers
industries, and competition is now poised to using a smartphone app to transact has more
disrupt the traditional banking and payments than doubled (2.6 times) year on year.
industry. Smartphone adoption is increasing
In Asia, Latin America and Middle East and
dramatically in emerging markets, especially
North Africa, one in three mobile money
where mobile operators are investing heavily
providers that offer a smartphone app are
in connectivity and vendors are pushing
seeing 20 per cent or more of their active
affordable devices to market.22
customer base transacting through the app,
In several markets where mobile money and a growing number of deployments in
has scaled, users are more likely to own a Asia and Latin America are seeing over half of
smartphone than a feature/basic phone.23 transactions performed through smartphone
Global smartphone adoption was 60 per cent apps.
in 2018 and is predicted to increase to over
These deployments also have higher average
79 per cent by 2025. Dramatic uptake is also
revenue per user (ARPU) as smartphone
expected in:
customers typically transact twice as much
• Emerging markets: Currently at 56%, set as customers using traditional feature phones
to rise to 78% by 2025 and register higher ticket sizes (owing to
typically higher incomes) — an attractive
• South Asia: 48% by end of 2018, set to rise
target segment. The story is very different
to 75% by 2025
in Africa, where over 90 per cent of mobile
• Sub-Saharan Africa: 39% by end of 2018, money transactions are still driven by USSD.
set to rise to 66% by 2025 However, with smartphones and data-enabled
For mobile money providers, smartphones devices becoming more affordable and
unlock access to a broader customer base equipped with longer battery life, growth is
and allow them to offer an enhanced user likely to accelerate.
experience and a wider range of financial
products and services. To capture the
The total number of customers
using a smartphone app to
x2.6 transact has more than doubled
(2.6 times) year on year.
22. Baah. B and Naghavi, N. (2018). Beyond the basics: How smartphones will drive future opportunities for the mobile money industry. GSMA.
23. GSMA Intelligence consumer survey
222018 State of the Industry Report on Mobile Money
2 Diversification of the financial
services ecosystem
2018 saw many non-financial players account has increased rapidly. South Asia
diversify and invest in mobile-based payment has seen the fastest growth in the region — a
businesses in order to gain market access in compound annual growth rate (CAGR) of 63
the payments space and then leverage their per cent between 2013 and 2018 — which
experience to strengthen portfolio companies. today means that more than a fifth of the
While this underscores the commercial population has a mobile money account
potential of mobile money, not to mention (Figure 6). Meanwhile, in Southeast Asia,
the social benefits, it is also a sign of growing account registration rates among the main
competition. ASEAN24 economies have grown at a CAGR
of 44 per cent, resulting in a similar adult
In recent years, the share of the combined
population penetration rate of close to 20 per
adult population in Asia with a mobile money
cent.
Figure 6. Mobile money account registration growth in Asia
South Asia 63% East Asia
& Pacific
44%
CAGR CAGR
(2013-18) (2013-18)
2,1% 22% 3,3% 19%
2013 2018 2013 2018
% of adult population registered for % of adult population registered for
a mobile money account a mobile money account
While the growth in registered accounts in Asia is remarkable, rates of account ownership and
usage are still low in many countries, providing a very real and sizeable opportunity for MNOs
and other financial services providers. Although competition and consolidation in Asia are
increasing, the addressable market is by all accounts substantial enough to accommodate both
MNO and non-MNO players.
24. ASEAN stands for the Association for the Southeast Asian Nations. Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam (not
included: Laos and Brunei).
232018 State of the Industry Report on Mobile Money
The looming opportunity for Asian mobile money providers
Asia’s financial ecosystem sets itself apart While mobile money providers in Asia are
by the role played by non-banks, which connected to more online merchants than
constitute a significantly different set of the average global mobile money service,
players than in markets in Sub-Saharan deployments have fewer integrations with
Africa or Middle East and North Africa, companies leveraging mobile money for bill
for example. While large MNO groups still and bulk payments. On average, Asian mobile
dominate Africa’s mobile money ecosystem, money providers are connected to 33 billers,
providing an expanding range of innovative less than a third of the global average of
digital solutions to more urban and tech- 102, while the difference in bulk payments is
savvy customers, the competitive landscape even greater (69 versus 237). This presents a
in Asia has changed substantially. In addition significant and largely untapped opportunity
to mobile money providers, the Asian market for Asian mobile money providers to
also hosts a sizeable number of fintechs such expand their service offering. The disparity
as Alipay and tech giants such as Tencent. in bulk disbursements and bill payments is
particularly noteworthy as these services have
These players have raised significant capital
historically been the main drivers behind the
in the last few years, which has allowed them
digitisation of mobile money ecosystems in
to connect with a wide variety of partners
other markets.
and develop many customer-centric use
cases, including transportation and food, With this looming opportunity in Asia,
medical and financial services. Alipay alone deployments in the region stand to
has partnered with more than 200 financial benefit tremendously from increasing
institutions and offers over 2,500 mutual their investments in mobile money and
investment funds and is integrated with over concentrating on expanding integrations and
100,000 merchants outside China. use cases.
242018 State of the Industry Report on Mobile Money
The evolving financial services ecosystem
Ant Financial. Asian markets such as Indonesia, Malaysia, the
In Southeast Asia, Ant Philippines and Vietnam, and in early 2018, the
Financial has announced company purchased all of Uber’s Southeast
a string of acquisitions, Asian operations. Grab’s rapid expansion
including Paytm in India, Mynt in the Philippines should be seen in the context of another ride-
and bKash in Bangladesh. It has also entered hailing service, Go-Jek in Indonesia, which
into a strategic partnership with MoneyGram, has launched a mobile wallet, Go-Pay, and
and in Kenya partnered with Equitel and Red announced a $500 million regional expansion
Dot Payments to serve Chinese tourists in that plan in 2018. Grab’s most recent move in digital
market. While these investments provide new payments is partnering with MasterCard to
market access to global organisations, mobile- offer its 110 million+ registered users a virtual
based payment businesses also benefit. For prepaid card to enable online payments and the
example, bKash, a mobile money provider in possibility to cash-out.
Bangladesh, plans to leverage Ant Financial’s
investment to add capabilities around product
offering and technological enhancements like MercadoLibre. In Latin
artificial intelligence (AI). America, Argentina-based
MercadoLibre has become the
most popular e-commerce
GrabPay and platform in the region. As of 2017, the service
Go-Pay. Over-the- had 212 million registered users across 18
top (OTT) players are countries in the Americas. With its marketplace,
expanding rapidly as Mercado Pago, at its centre, MercadoLibre has
international and regional competition stiffens. expanded into offering a range of payment
Singapore-based ride-hailing giant, Grab, first and financial services, such as credit and
expanded into mobile payment services in 2017 wealth management, serving both MSMEs and
with the launch of GrabPay. The mobile wallet individual users.
service is now available in major Southeast
Figure 7. New business models emerging in the global financial services ecosystem (illustrative)
Commercial Payment Non-transactional
Telecom Social platform
platform services financial services
Mobile operators
Source: GSMA / Sofrecom
252018 State of the Industry Report on Mobile Money
3 Increasingly complex regulation
Enabling regulation has a tangible influence distribution of mobile money services as
on the adoption and use of mobile money agents or super agents.
services. The most successful providers
Regulatory change also came to Indonesia
today overwhelmingly operate in markets
in June 2018, which despite increasing
where regulation is enabling. Conversely,
transaction limits for deposits by unregistered
restrictive regulatory frameworks can stifle
users, has so far not made the market any
investment, limit the roll out of new services
more enabling for mobile money providers.
and raise costs for consumers, all of which
Regulations have been tightened with new
can negatively affect adoption and activity
provisions for IDR 3 billion minimum capital,
rates. In several cases, 2018 regulatory
limits on foreign shareholding (49 per cent)
developments appeared encouraging at first
and a mandatory requirement to link all
glance, yet their layers of complexity reveal
foreign remittance providers through the
increasingly restrictive requirements.
national payments gateway.
The Bangladeshi government, for example,
Globally, the mobile money industry
released a new regulatory framework in
encountered developments in five main areas
July 201825 that allows non-banks, such as
of regulation in 2018, all of which affect the
NGOs, investment and fintech companies, to
provision of mobile money services: taxation;
participate as equity partners (maximum 49
Know Your Customer (KYC) requirements;
per cent) with scheduled commercial banks.
cross-border remittances; national financial
Although a welcome concession, MNOs are
inclusion strategies; and data regulation. Each
specifically prohibited from partnering with
of these areas are explored in more detail
scheduled commercial banks to offer mobile
below.
financial services. Their role is limited to the
25. Bangladesh Mobile Financial Services Regulations (2018).
262018 State of the Industry Report on Mobile Money
Taxation
The mobile industry is already one of money does little to support public
the highest taxed in Sub-Saharan Africa. finances and to advance the many positive
Throughout the region, mobile money contributions of mobile money.27 Moreover,
providers encounter three layers of taxation: excessive taxation undermines prospective
general taxes, such as value-added taxes; investment into mobile money, at a time when
mobile sector-specific taxes, such as excise mobile operators already face considerable
duties on airtime usage, and mobile money cost pressures to enhance service quality,
taxes.26 In 2018, industry concerns intensified expand networks and meet new regulatory
regarding the introduction of taxes on requirements. As an alternative to excessive
mobile money transactions throughout the taxation, governments should consider
region and beyond. Affected markets include supporting the growth of mobile money
Uganda, Kenya, Zimbabwe and Gabon. services by digitising the payment of fees,
rates, taxes and levies due from taxpayers.
Our analysis has shown that taxing mobile
Mobile money taxation in Uganda
Mobile money is an accelerator for payments smaller amounts via mobile money. This tax will
and money transfers in Uganda, with over 30 also have an impact on mobile money account-
per cent of the population actively using the to-bank transfers that enable commercial banks
service and over 200,000 jobs directly created to capture around US $19 million in deposits,
by the mobile money industry. As a result, the which stand to decline. Also at risk are mobile
introduction of a one per cent tax on mobile money use cases: 60 per cent of electricity
money deposits, withdrawals, transfers and and national water payments are made via
payments by the Ugandan government in July mobile money; around 5,000 savings and credit
2018 made mobile money transactions more cooperatives collect deposits and disburse
expensive for a significant number of users. microloans using mobile money; 12,000 to
While the introduction of a 10 per cent excise 15,000 farmers receive daily microloans via
duty in 2013 only affected mobile money mobile money; and 40,000 to 50,000 transfers
transaction fees, this new initiative aims to tax are made to refugees every month.
both the transaction fee and the transaction
By attempting to introduce a tax-boosting
value.
measure to meet fiscal targets for 2018–19,
The new tax had an almost immediate the Ugandan government has put the existing
negative effect: the value of P2P transactions tax base at risk. The government has since
declined by 50 per cent within two months attempted to redress the issue by reducing
of implementation while the value of all the tax to 0.5 per cent of the transaction value
transactions dropped by around 25 per cent. of withdrawals only. However, rather than tax
Around 100,000 agents saw their earnings mobile money transaction values directly,
decline by 35 to 40 per cent, and around the government could tax mobile money in a
30,000 agents went out of business completely. less punitive manner or, even better, leverage
Customers have resorted to using cash or mobile money to increase collection of existing
agency banking while others are transferring taxes in a digital and efficient way.
26. Muthiora, B. and Raithatha, R. (2017). “Rethinking mobile money taxation.” Mobile for Development Blog. GSMA.
27. Ibid
272018 State of the Industry Report on Mobile Money
Know Your Customer (KYC) requirements
The ability to conduct KYC efficiently and example, by using SIM registration data for
effectively is key to expanding access to mobile money account opening. Pakistan,
mobile money. However, the mobile money Ghana, Sri Lanka and Haiti are all examples
industry’s capacity to scale services is of countries that permit the use of SIM
challenged by onerous KYC requirements. To registration data for mobile money KYC.
address these challenges, providers are taking
• Use of digital IDs to enable electronic
two approaches:
KYC (e-KYC): To meet the needs of an
• Simplifying customer onboarding: increasingly digitised user base, mobile
In markets without ubiquitous money providers — and the broader
identification systems, mobile money financial services industry — are looking to
providers struggle to onboard prospective innovative technologies for ID verification,
customers who are unable to provide such as queryable digital ID systems
sufficient proof of identity. While ensuring and biometric authenticators. Some
universal ID coverage remains a long- countries, such as Kenya, have ID systems
term endeavour, a careful relaxation of that already offer e-KYC, and several
regulatory restrictions in the short term can others are well positioned to offer such
bring more people into the financial system services should governments embrace the
without substantially increasing risks; for opportunity.28
Cross-border remittances
Mobile money remittances can be a UEMOA are leveraging the ease of movement
lifeline and vital source of income for poor of people and trade by creating integrated
communities in developing countries. payments systems.
The total value of mobile money-enabled
This progress in mobile money-enabled
international remittances processed in
international remittances has been facilitated
2018 was $4.3 billion. Results from a study
in part by regulators’ willingness to allow
conducted in August 2017 showed that
market entry for non-traditional providers.
mobile money-enabled remittance services
However, in many markets, regulation
are available across 184 unique corridors,
remains a barrier to further expansion.
and there is growing awareness among
These challenges are different from country
governments, regulators and the industry
to country, ranging from the acquisition of
itself that mobile money can lower the costs
a license that allows mobile money to be
of sending international remittances.
used for international remittances, to more
The average cost of sending $200 via mobile complex issues that can hamper the opening
money is 1.7 per cent, a reduction of nearly of new corridors such as data localisation
40 per cent since 2016.29 Recognising the requirements, or differences between
role of mobile money in lowering the costs of international and domestic KYC requirements.
sending remittances, there has been a greater
Against this backdrop, establishing an open
push for interregional operating models to
and level playing field and encouraging
ensure more people can benefit from the
competition through conducive regulation
cost savings. In Sub-Saharan Africa, regional
will be crucial in unlocking the full potential of
economic communities SADC, EAC and
mobile money for international remittances.
28. Kipkemboi, K., Pisa, M and Woodsome, J. (2019). Overcoming the Know Your Customer hurdle: Innovative solutions for the mobile money sector. GSMA
29. GSMA (2017). Working Paper: Guidelines on International Remittances through Mobile Money.
282018 State of the Industry Report on Mobile Money
National financial inclusion strategies
Governments across developing economies Jordan, Palestine and Russia are planning
have initiated policy reforms to improve the to launch their strategies within the year.
quality, access and availability of financial A good NFIS is regularly reviewed against
services through national financial inclusion defined objectives and updated within agreed
strategies (NFIS). An NFIS sets milestones timelines, as Tanzania demonstrated in 2018.30
and defines roadmaps for public- and private- Other qualities of an effective NFIS include
sector stakeholders to achieve financial technology neutrality, gender inclusion and
inclusion targets. As of December 2018, proportionate regulation.
36 countries have adopted an NFIS, and
Data regulation
For mobile money providers, customer to data localisation, data security, the lawful
data provides an important opportunity basis for data processing and data sharing.
to diversify and improve service offerings, For example, data localisation requirements
bridge the financial inclusion gap and stipulate that customers’ personal data
ultimately boost profits. At the same time, collected within a particular jurisdiction
these developments inevitably increase must be stored or processed within that
the risks of data breaches and reputational jurisdiction’s boundaries, which may result in
damage, so maintaining consumer confidence prohibitive costs for providers, disincentivising
in mobile money services is vital to leverage market entry and compromising innovation.
new commercial opportunities and safeguard For regulators, the challenge of strengthening
broader financial inclusion efforts. data protection without stifling innovation
requires collaboration with industry players to
Mobile money providers will need to consider
strike the right balance.
recent changes in data protection regulation
that may have an impact on the provision of
mobile money services, particularly relating
30. The Alliance for Financial Inclusion (2018). Tanzania: National Financial Inclusion Framework 2018-2022.
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