The Mobile Money Ecosystem, Africa

The Mobile Money Ecosystem, Africa

Written by Julaire Hall

Throughout the next few blog posts, I'll continue the conversation by exploring the Mobile Money Ecosystem in specific regions, starting with Africa.

Is Africa still considered the global epicenter of mobile money?

When we speak of mobile money, Africa is often showcased as the forerunner in that arena owing to its continued dominance in terms of adoption and usage of mobile money services. For the past decade, Africa has maintained the lead in the evolution of global mobile money accounting for a continuous majority (approximately 46%) of the world’s registered mobile money users. In charting mobile money, GSMA notes that Africa has some 166 live mobile money services including Airtel Money, Orange Money, MTN Mobile Money, Ecocash, and Tigo Pesa; and accounts for some 781 million registered users, transacting some $44.9 billion volume in payments. (SOTIR on Mobile Money, 2023). As the industry continues to grow exponentially year on year, there have been numerous innovative fintechs emerging, regulatory frameworks evolving, and expansion of the agent network systems in countries enabling mobile money services.

Infographic showing the mobile payments landscape in Africa
A snapshot of the African payments landscape, 2022 (Source: Briter Bridges)

In last week's blog post, I shared a course-led research conducted by myself and a colleague, comparing the payments landscape in both Jamaica and Nigeria. A key finding amongst both locales was that whilst several inroads are being made towards a digital, mobile payments landscape; cash is still widely used by many, especially in less formal market economies and communities. Even so, the value of mobile money cannot be understated and is quite evident in its reach in the distribution of what we know as formal financial services to the unbanked and underserved locales inspiring independence, inclusion, and security amongst people.

A New Wave of Mobile Money

Africa has recorded an ongoing shift in the deployment of mobile money services from what started as a telecoms-led revolution with service offerings such as peer-to-peer transfers, and cash-in/cash-out transactions to what we can deem more dynamic, innovative fintech-enabled markets providing an extensive array of financial services including savings, bill payments, loans, and more.

With the advent of technology, the availability of low-cost smartphones, and the deployment of 3G technologies across African territories, access to users has increased significantly and we’ve also seen in recent times more interconnectivity with traditional banks and payment systems. With evolving regulations, we’ve noted that bank-to-mobile interoperable transactions are playing a significant role in advancing mobile payments. Mobile money operators in Tanzania, for instance, have formed a pact of universal interoperable networks allowing transactions regardless of mobile money accounts. Tigo has also partnered with DCB Bank to enable access to the unbanked by offering bank services through its mobile payment network. M-Pesa has partnered with Visa to integrate tap-to-pay features and to provide virtual cards that will allow users access to the world of e-commerce.

Interoperability in Africa’s Mobile Money Ecosystem

As the mobile money industry continues to grow with varying providers, the issue of interoperability across platforms and networks remains a challenge to frictionless transactions. At the Interledger Foundation, we pride ourselves on the technological advancements that will enable interoperable, currency-agnostic transactions. We also provide the space for emerging and current innovators to test and integrate our technology to reach the unbanked and underserved in territories across the world.

Chimoney, a global payment solutions provider, is integrating the Interledger protocol into Chimoney's robust platform to deliver seamless interoperability across many payment networks, from traditional financial systems like Bank Accounts and Mobile Money to emerging payment systems like blockchain. The Interledger-enabled Chimoney Wallet is being positioned to cement Chimoney’s presence in African countries with cash-out capabilities via bank accounts, mobile money services like M-Pesa, global gift cards, airtime, and more. I am super excited to see the impact Chimoney will make in the African markets.

With the continued mobile proliferation and internet penetration, what do you consider to be some other factors that have or continue to influence Africa’s adoption and usage of mobile money services?

Julaire Hall

Julaire is a highly accomplished project and program management professional with 10+ years of extensive experience in planning, executing, and overseeing the successful delivery of programs in government and the global services sector.