State of the
Industry Report
on Mobile Money
2018
Copyright © 2019 GSM Association
The GSMA represents the interests of mobile operators
worldwide, uniting more than 750 operators with over
350 companies in the broader mobile ecosystem,
including handset and device makers, software companies,
equipment providers and internet companies, as well as
organisations in adjacent industry sectors. The GSMA also
produces the industry-leading MWC events held annually in
Barcelona, Los Angeles and Shanghai, as well as the Mobile
360 Series of regional conferences.
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 GSMA’s Mobile Money programme works to
accelerate the development of the mobile money
ecosystem for the underserved.
For more information, please contact us:
Web: www.gsma.com/mobilemoney
Twitter: @GSMAMobileMoney
Email: mobilemoney@gsma.com
Mobile Money
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
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
INNOVATION
14
FOUR TRENDS SHAPING THE MOBILE MONEY
INDUSTRY
18
CONCLUSION 34
Contents
2018 State of the Industry Report on Mobile Money
Foreword
2018 State of the Industry Report on Mobile Money
2
For over a decade, mobile money has been
transforming access to financial services
around the world. The scale of mobile money
continues to grow, with more than 866
million registered accounts in 90 countries
and $1.3 billion transacted every day. The
progress, challenges and most ground-
breaking industry trends are explored in this
year’s flagship report from the GSMA’s Mobile
Money team.
For the world’s most vulnerable, especially
displaced persons and women, the benefits
of mobile money are real and far reaching.
Fifty-five per cent of surveyed mobile
money providers have now partnered
with humanitarian organisations, an
initiative closely supported by our Mobile
for Humanitarian Innovation programme.
In August 2018, our Connected Women
team released the Gender Analysis and
Identification Toolkit (GAIT), a machine
learning algorithm that analyses mobile
usage patterns, to assist operators in reaching
underserved female customers with relevant
and tailored products and services.
We were also honoured to launch the
GSMA Mobile Money Certification in April
2018, demonstrating the mobile industry’s
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
internet access and smartphone adoption.
Successful providers are moving towards a
'payments as a platform approach', expanding
their value proposition to a full range of third-
party products and services to suit customers
with diverse needs. This signals the start of
a major shift in the mobile money industry,
which will promote digitisation more broadly:
mobile money customers will not just have
access to an account, but rather to a full suite
of services that are relevant to their daily
lives, encouraging them to keep their funds in
digital form and building resilience to financial
shocks.
Now more than ever, mobile’s unparalleled
global scale provides a tremendous
opportunity to reach the 1.7 billion people
who remain financially excluded. I am pleased
to have been appointed to the United Nations
Secretary-General's Task Force on Digital
Financing of the Sustainable Development
Goals to harness this potential, and I look
forward to working closely with fellow Task
Force members to unleash the power of
technology and digital financing in all corners
of the world.
I hope that you enjoy exploring the 2018
State of the Industry Report on Mobile
Money, which has been produced with the
generous support of the Bill & Melinda Gates
Foundation, The Mastercard Foundation and
Omidyar Network.
Mats Granryd
Director General, GSMA
Foreword
3
2018 State of the Industry Report on Mobile Money
Executive
Summary
2018 State of the Industry Report on Mobile Money
4
Providers are attracting new investments
and forming strategic partnerships,
leveraging data and innovative financial
technologies, and developing robust and
interoperable payments systems to diversify
their revenue, product oerings and
customer base.
In 2018, following a decade of incredible
growth, the mobile money industry is still
getting the fundamentals right. Mobile money
accounts continue to provide a gateway to
life-enhancing services, such as healthcare,
education, financial services, employment
and social protections, which are reaching
customers who have traditionally been
underserved by the financial system. Many
industry players have reached scale, and
account registrations, activity rates and
transaction values continue to grow steadily.
While cash-in and cash-out transactions still
represented the majority of mobile money
flows in 2018, digital transactions grew at
twice the rate, driven largely by bill payments
and bulk disbursements. Successful providers
are now looking to strengthen their value
proposition with a full suite of use cases
that serve diverse customer needs. This shift
towards a 'payments as a platform' approach
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:
An enhanced customer experience. 2018 saw
a dramatic increase in smartphone adoption
in emerging markets, unlocking access
to a broader customer base and allowing
providers to oer a wider range of financial
products and services through user-friendly
apps. Interoperability also continued to be
a strategic priority for the industry, not only
to increase the utility of mobile money for
users, but also to allow increasingly important
use cases to scale up faster. The main
drivers of digital growth in 2018 were bulk
disbursements and bill payments — a signal
that mobile money providers are becoming
strong partners for enterprises.
Diversification of the financial services
landscape. While large MNO groups still
dominate Africa’s mobile money ecosystem,
in Asia, fintechs and tech giants have entered
the payments space and developed a
range of customer-centric use cases, from
transportation to food, medical and financial
services, and amassed a vast number of
partners, including financial institutions.
Mobile money providers in both Asia and
Latin America, including fintech players,
are driving growth in the mobile payment
ecosystem, and expanding from e-commerce
to oer financial services such as credit.
Now processing over $1.3 billion a day, the
mobile money industry added a record
143 million registered customers in 2018.
Executive Summary
5
2018 State of the Industry Report on Mobile Money
Increasingly complex regulation. As the number
of players in the digital financial services ecosystem
grows exponentially, regulation is becoming
increasingly complex. Five main themes dominated
the mobile money regulatory landscape in
2018: taxation, KYC requirements, cross-border
remittances, national financial inclusion strategies
and data protection. These developments call for a
more nuanced evaluation of regulatory frameworks
and collaboration between providers and regulators
to achieve the mutual aim of expanding mobile
money services.
Expansion of the mobile money value proposition.
In our 2018 Global Adoption Survey, close to
80 per cent of providers reported that most of
their revenues are driven by customer fees. Many
providers are now seeking to strengthen their
value proposition with a 'payments as a platform'
model. This connects consumers and businesses
with a range of third-party services to meet their
evolving needs, from enterprise solutions for micro-,
small- and medium-sized enterprises (MSMEs) to
e-commerce, credit, savings and insurance.
It was not only these trends that captured our
attention in 2018. Other compelling developments
include reforms in Africa’s three most populated
countries, Nigeria, Ethiopia and Egypt, which we
expect to spark a wave of adoption which could
lead to over 110 million new mobile money accounts
in the next five years.
Mobile money continues to play a vital role in
financial inclusion. Globally, around 1.7 billion
people still lack access to safe, reliable and
convenient financial services.
1
However, 31 emerging
markets have seen an impressive increase in
financial inclusion rates, which can be attributed to
simultaneous growth in active mobile money use.
Although much work remains to be done in closing
the mobile money gender gap, there is evidence
from the 2017 Global Findex that the mobile
money gender gap has narrowed in 17 countries
in Sub-Saharan Africa and in one country in Latin
America (Bolivia). Our Global Adoption Survey data
revealed a strong positive correlation between the
percentage of female agents in a provider’s network
and female customers.
In this report, we take a closer look at these trends
and unfolding industry stories. The full findings of
this year’s State of the Industry Report on Mobile
Money are based on the analysis of data collected
through the GSMA’s Annual Global Adoption Survey.
272
MOBILE MONEY DEPLOYMENTS
ARE LIVE IN
COUNTRIES
90
62
MOBILE MONEY
DEPLOYMENTS
HAVE MORE THAN
866m
MOBILE MONEY IN 2018
REGISTERED MOBILE MONEY ACCOUNTS
20% increase from 2017
processed daily
$1.3bn
by the mobile money industry
Grew at
more than
TWICE the
rate of
cash-in/
cash-out
values
$206
PER MONTH
A TYPICAL ACTIVE MOBILE
MONEY CUSTOMER MOVES
1m
90-DAY
ACTIVE
ACCOUNTS
90m
NEW REGISTERED ACCOUNTS
31% increase from 2017
x2
compared to 54 in 2017 and 13 in 2013
54%
GHANA, CÔTE D’IVOIRE,
BENIN AND SENEGAL
OF THE COMBINED
ADULT POPULATION OF
use mobile money on an active basis
ASIA
DIGITAL TRANSACTION
VALUES
1. World Bank Group (2018). The Global Findex Database 2017.
6
2018 State of the Industry Report on Mobile Money
272
MOBILE MONEY DEPLOYMENTS
ARE LIVE IN
COUNTRIES
90
62
MOBILE MONEY
DEPLOYMENTS
HAVE MORE THAN
866m
MOBILE MONEY IN 2018
REGISTERED MOBILE MONEY ACCOUNTS
20% increase from 2017
processed daily
$1.3bn
by the mobile money industry
Grew at
more than
TWICE the
rate of
cash-in/
cash-out
values
$206
PER MONTH
A TYPICAL ACTIVE MOBILE
MONEY CUSTOMER MOVES
1m
90-DAY
ACTIVE
ACCOUNTS
90m
NEW REGISTERED ACCOUNTS
31% increase from 2017
x2
compared to 54 in 2017 and 13 in 2013
54%
GHANA, CÔTE D’IVOIRE,
BENIN AND SENEGAL
OF THE COMBINED
ADULT POPULATION OF
use mobile money on an active basis
ASIA
DIGITAL TRANSACTION
VALUES
2018 State of the Industry Report on Mobile Money
7
THE BIG PICTURE:
Availability,
adoption,
accessibility
and usage
2018 State of the Industry Report on Mobile Money
8
In 2018, the mobile money industry added
another 143 million registered customers
globally with the total number of accounts
reaching 866 million — a 20 per cent year-
on-year increase. As in 2017, most of this
growth came from Asia, where 90 million new
accounts were opened. East Asia and Pacific
experienced the highest year-on-year account
growth at 38 per cent, and the region now
represents 11 per cent of registered accounts
globally (Figure 1).
Activity rates are stable at the global level:
34.5 per cent of the world’s registered
accounts are now active,
3
up from 33.9 per
cent in 2017. Activity rates are once again
highest in Latin America and the Caribbean
(48.5 per cent), while the biggest increases
are in Asia (East Asia and Pacific and South
Asia) where activity rates in several countries
increased by more than 10 per cent. While
activity rates in Sub-Saharan Africa remain
stable at 36.8 per cent, largely unchanged
from 2017, the region added over 17.5 million
new active accounts in 2018. In 13 African
countries,
4
over a third of adults are active
mobile money users.
Transaction values increased by 17 per cent
in 2018, with 272 live deployments in 90
countries transacting $40.8 billion in the
month of December. The industry is therefore
now processing over $1.3 billion per day, and
while cash-in and cash-out transactions still
represent the majority of mobile money flows,
digital transactions
5
grew at more than twice
the rate driven largely by bill payments and
bulk disbursements. For the average active
mobile money customer, this equates to 12
transactions a month worth $206.
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.
THE BIG PICTURE:
Availability, adoption,
accessibility and usage
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).
9
2018 State of the Industry Report on Mobile Money
3.1%
Latin America
& the Caribbean
45.6%
Sub-Saharan
Africa
5.6%
MENA
33.2%
South Asia
11.0%
East Asia & Pacific
1.4%
Europe
& Central Asia
6. Only countries with live mobile money services are represented.
7. World Bank Group (2018). The Global Findex Database 2017.
8. Ibid.
Global spread of registered mobile money customers, December 2018
6
Figure 1.
The potential of India’s payments banks
While almost 80 per cent of India’s population
is now banked,
7
the country has one of the
world’s highest inactivity rates, with nearly
half of banked customers (48 per cent) yet to
perform a withdrawal or transaction.
8
This is
the context in which payments banks began
operating in 2016, and today there are seven in
operation, three of which are MNO-led.
Payments banks are financial institutions that
accept small-scale deposits (up to Rs1 lakh, or
about $1,407 each), but are not allowed to lend.
They began operating after the central bank,
the Reserve Bank of India (RBI), granted in-
principle payments bank licences to introduce
unbanked and underserved customers to more
formal channels.
Three years on, the sector has yet to show its
true potential. Actions including a ban on new
customer registration, the imposition of certain
penalties, slow deposit collection and delayed
launches were exacerbated when customer
onboarding also became more complex. A
recent Supreme Court ruling has created
uncertainty around the extent to which the
private sector may continue to use Aadhaar,
India’s digital identification system, to link
accounts.
As a financial services platform, payments
banks could re-bundle a host of innovative
third-party services and leverage the services
that traditional banks oer while also attracting
unbanked customers, allowing India’s payments
banks to live up to their true potential.
10
2018 State of the Industry Report on Mobile Money
Egypt Nigeria Ethiopia
9. GSMA Intelligence and World Bank.
10. World Bank Group (2018). The Global Findex Database 2017.
11. This refers to the Authorisation, KYC and Infrastructure and Investment Environment
dimensions of the Mobile Money Regulatory Index.
12. In October 2018, The Central Bank of Nigeria ocially proposed the creation of Payment Service Banks.
13. Alliance for Financial Inclusion (2018) Financial inclusion through digital financial services and fintech:
the case of Egypt.
14. GSMA analysis
Africa’s mobile money sleeping giants
Figure 2.
Adult population: Adult population: Adult population:
Adults with
an account:
Adults with
an account:
Adults with
an account:
Mobile Money
Regulatory
Index Score:
Mobile Money
Regulatory
Index Score:
Mobile Money
Regulatory
Index Score:
67m 111m 64m
32.8% 39.7% 34.8%
67.21 65.67 65.83
Unlocking future growth: Africa’s mobile money sleeping giants
In a growing number of countries in Sub-
Saharan Africa, a traditional stronghold of
mobile money, over 60 per cent of the adult
population has a mobile money account.
While providers in these countries are still
driving growth in registered accounts, rates
will slow as the majority of the population
gains access to mobile money. However,
there is still a tremendous opportunity to
unlock growth and increase financial inclusion
in the continent’s mobile money sleeping
giants: Nigeria, Ethiopia and Egypt. Home
to a combined adult population of over
242 million,
9
Africa’s three most populated
countries have had limited availability of
mobile money services and low rates of
financial inclusion (Figure 2).
10
The reasons for this vary. In Nigeria and
Egypt, regulatory frameworks have allowed
few players to oer mobile money services,
resulting in lower levels of investment and
fewer innovative products and services. In
Ethiopia, a strictly regulated telco, restrictions
on competition, lack of internet connectivity,
and low levels of consumer trust and financial
literacy have created barriers to uptake
and market entry. The unfavourable market
conditions in these countries are reflected
in their low scores on the GSMA’s Mobile
Money Regulatory Index (see page 29). These
scores are due to factors such as restrictive
or unclear legal frameworks, lack of flexibility
and clarity around innovation and investment,
and disproportionate Know Your Customer
(KYC) requirements.
11
But change is coming. In 2018, regulatory
reforms were introduced in Nigeria
12
and
Egypt
13
to harness the potential of mobile
money to drive financial inclusion, and
reforms and an ambitious financial inclusion
strategy in Ethiopia have been attracting the
attention of both MNOs and non-MNO-led
players.
Despite the challenges to overcome, we
anticipate that these reforms could spark a
wave of adoption in these three countries —
over 110 million new mobile money accounts
14
in the next five years — and help to achieve
the financial inclusion targets set out in
their respective national financial inclusion
strategies.
11
2018 State of the Industry Report on Mobile Money
Across Egypt,
Ethiopia and
Nigeria, over 110m
mobile money
accounts can be
unlocked in the
next five years
MARCH APRIL
APRILSEPTEMBER APRIL
OCTOBERSEPTEMBER NOVEMBER
NOVEMBERDECEMBER NOVEMBER
MOBILE MONEY HIGHLIGHTS IN 2018
2018 saw eorts to pursue
new investments and
strategic partnerships, to
leverage data and innovative
financial technologies,
and to develop robust and
interoperable payments
systems to support a range
of use cases and financial
products.
INVESTMENT.
Telenor Group and Ant
Financial enter a strategic
partnership to deliver inclusive
financial services in Pakistan.
INVESTMENT.
Ant Financial invests in
Bangladesh’s bKash to expand
the capabilities of the platform
to ultimately boost financial
inclusion.
REGULATION.
The Central Bank of Nigeria
issues guidelines for the
licensing, regulation and
operations of payment service
banks, enabling mobile
operators to lead financial
inclusion eorts.
INTERNATIONAL
COMMITMENT.
The United Nations announces
the launch of a global task
force on Digital Financing of
the Sustainable Development
Goals, with the GSMA as a
member.
INVESTMENT.
American investment
conglomerate Berkshire
Hathaway acquires a four per
cent stake in Paytm, India’s
largest digital payments
company.
INNOVATIVE
USE CASES.
84.6 per cent of Ghanaian
investors buy shares for MTN
Ghana’s Initial Public Oer
(IPO) using the MTN Mobile
Money Portal.
INVESTMENT.
Econet Wireless demerges and
lists Cassava Smartech (which
includes its EcoCash mobile money
operation) separately on the
Zimbabwe Stock Exchange (ZSE)
valued at around $3.9 billion soon
after listing.
CONSUMER
PROTECTION.
GSMA launches the GSMA Mobile
Money Certification scheme. Over
the course of the year, nine mobile
money providers become certified,
collectively covering over 133
million customer accounts.
STRATEGIC
PARTNERSHIP.
PayPal, Safaricom and TransferTo
announce a collaboration
enabling M-Pesa users in Kenya
to securely transfer funds
between PayPal and M-Pesa
accounts.
REGIONAL
INTEROPERABILITY.
Orange and MTN launch a
pan-African mobile money
interoperability venture, Mowali, to
scale up mobile financial services
across Africa.
STRATEGIC
PARTNERSHIP.
Safaricom and Western Union
partner to allow M-Pesa users to
transfer money to and from 200
countries. Kenya’s Family Bank Ltd
and fintech SimbaPay also partner
to enable M-Pesa customers in
Kenya to send money to
WeChat users
in China.
12
2018 State of the Industry Report on Mobile Money
MARCH APRIL
APRILSEPTEMBER APRIL
OCTOBERSEPTEMBER NOVEMBER
NOVEMBERDECEMBER NOVEMBER
AS OF
DECEMBER
NUMBER OF
DEPLOYMENTS
REGISTERED
ACCOUNTS
ACTIVE 90-DAY
ACCOUNTS
TRANSACTION
VOLUME
VALUE
US$
REGIONAL GROWTH IN 2018
YEAR-ON-YEAR
GROWTH
23.5m 11.6m
66.4m 1.0bn
27m 13.1m
46.5m 945m
2017
2018
14.7% 10.3% -29.9% -7.9%
28
LATIN AMERICA &
THE CARIBBEAN
YEAR-ON-YEAR
GROWTH
47.3m 18.0m 39.7m 376.2m
48.9m 18.6m 41.0m 473.0m
2017
2018
3.4% 3.5% 5.6% 25.7%
20
MIDDLE EAST &
NORTH AFRICA
YEAR-ON-YEAR
GROWTH
223.7m 63.9m 447.5m 7.5bn
287.6m 89.3m 565.1m 8.8bn
2017
2018
28.5% 39.9% 26.3% 17.9%
43
SOUTH ASIA
YEAR-ON-YEAR
GROWTH
722.9m 244.9m 2.1bn 34.9bn
866.2m 298.7m 2.4bn 40.8bn
2017
2018
19.8% 21.9% 14.4% 16.8%
272
GLOBAL
(TOTAL)
YEAR-ON-YEAR
GROWTH
68.5m 21.1m 74.9m 2.7bn
94.6m 29.8m 103.6m 3.7bn
2017
2018
38% 41.5% 38.3% 35.7%
41
EAST ASIA
& PACIFIC
YEAR-ON-YEAR
GROWTH
348.3m 128.3m 1.5bn 23.3bn
395.7m 145.8m 1.7bn 26.8bn
2017
2018
13.6% 13.6% 11.8% 15.3%
132
SUB-SAHARAN
AFRICA
13
2018 State of the Industry Report on Mobile Money
Reaching the
underserved
through
innovation
2018 State of the Industry Report on Mobile Money
14
Thirty-one markets saw an impressive
increase of more than five percentage points
in account ownership at financial institutions
between 2014 and 2017 (Figure 3), which can
be attributed to the simultaneous growth in
active mobile money use. In fact, in almost
half these markets, growth in active mobile
money use exceeded eight percentage points,
and a third of the 31 countries analysed were
in either Asia or Latin America, demonstrating
that the impact of mobile money on financial
inclusion has extended beyond Sub-Saharan
Africa.
Countries where mobile money’s contribution
to the overall growth of financial accounts is
not as significant tend to have a lower than
average Regulatory Index score (see page 29).
This highlights the importance of establishing
a more level regulatory playing field which
allows for innovative market-led solutions to
increase financial inclusion.
Reaching the underserved
through innovation
Growth of active 90-day mobile money accounts as
a proportion of adult population, 2014–2017 (percentage points)
Growth of all accounts as a proportion of adult population, 2014-2017 (percentage points)
= Country
Throughout 2018, mobile money
continued to play a critical role in
enhancing financial inclusion in emerging
markets.
The contribution of mobile money to financial inclusion
Figure 3.
0 5 10 15 20 25 30 35 40 45
0
5
10
15
20
25
30
In these countries, mobile money
has been the main driver of financial
inclusion growth
15
2018 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
digitisation of agricultural value chains
is a priority for a growing number of mobile
money providers. While in developing
economies about 15 per cent of adults receive
payments from the sale of agricultural
products, the vast majority of these payments
are made in cash, which can be risky,
inecient and inconvenient to collect. In
Ghana, Kenya and Zambia, the share of adults
receiving agricultural payments is about twice
the average for developing economies, and
about 40 per cent receive these payments
into an account, in most cases a mobile
money account.
15
Over 50 per cent of survey
respondents reported having a product
specifically targeted to rural customers or
plan to launch one in 2019.
Mobile money is increasingly a vehicle
for reaching forcibly displaced persons,
including refugees. Over 135 million
16
people required humanitarian assistance
and protection in 2018. To respond to these
demands, humanitarian organisations are
seeking to deliver services more eciently
and eectively and turning to digital financial
services to replace in-kind aid with direct
cash transfers. Our survey found that over
55 per cent of mobile providers in aected
countries are partnering with humanitarian
organisations, often to facilitate bulk
disbursements or provide access to basic
financial services.
Closing the gender gap in financial
inclusion will deliver broad benefits to
individuals, societies and economies, and
represents a considerable commercial
opportunity for mobile operators. There is
evidence that the mobile money gender gap
is narrowing: according to the 2017 Global
Findex, between 2014 and 2017, the gender
gap has narrowed in 17 countries in Sub-
Saharan Africa and in one country in Latin
America (Bolivia). However, much work
remains to be done as women in low- and
middle-income countries are still 33 per cent
less likely than men to use mobile money
17
and 10 per cent less likely to own a mobile
phone.
18
Our 2018 Global Adoption Survey data
showed that providers are leveraging their
core assets to address the persistent gender
gap in mobile ownership and use, with
female agents emerging as powerful assets
for reaching female customers. For those
respondents providing data on both the
percentage of their female agent base and
female customer base, we found a strong
positive correlation
19
between these two
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 Coecient. 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.
16
2018 State of the Industry Report on Mobile Money
Predicting the gender of mobile
subscribers using machine learning
Understanding the nature and scale of the
mobile gender gap is a prerequisite for closing
it, but a widespread absence of accurate
gender-disaggregated data is a consistent
barrier to measuring and evaluating mobile
ownership and mobile money use. This limits
the ability of operators to target underserved
female customers with eective, relevant and
tailored products and services.
To address this issue, the GSMA Connected
Women programme, in conjunction with
Dalberg Data Insights, developed the Gender
Analysis and Identification Toolkit (GAIT),
20
a machine learning algorithm that analyses
mobile usage patterns and allows operators to
predict the gender of its subscribers. By training
the algorithm on a small but accurately gender-
tagged sample of a customer base, operators
can see usage patterns by gender and identify
the gender of each of its subscribers with little
need for expensive primary research.
Once an operator has implemented GAIT across
its subscriber base, the gender estimates can
be applied to mobile money customers at an
individual subscriber level. In Bangladesh, a
GAIT pilot achieved 84.5 per cent accuracy in
gender prediction. Figure 4 below illustrates
how mobile usage diered between male and
female subscribers for two key indicators.
20. To access the GAIT toolkit and full technical documentation, see: “The GSMA’s Gender Analysis and Identification Toolkit (GAIT)”.
Average duration of incoming calls
by subscriber gender
Number of distinct cell towers visited
by subscriber gender
Proportion of subscribers
Duration (seconds)
0.10-
0.08-
0.06-
0.04-
0.02-
0.00-
0 100 200 300 400 500 600
Number of towers
Proportion of subscribers
0.08-
0.07-
0.06-
0.05-
0.04-
0.03-
0.02-
0.01-
0.00-
Key gender-disaggregated mobile usage indicators from the GAIT pilot in Bangladesh
Figure 4.
Male customers Female customers Overlap between male and female customers
17
2018 State of the Industry Report on Mobile Money
Four trends
shaping
the mobile
money
industry
2018 State of the Industry Report on Mobile Money
18
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.
Four trends shaping the mobile
money industry
While cash-in and cash-out transactions
still represent the majority of mobile money
flows in 2018 and grew by 11 per cent year
on year, digital transaction values grew
more than twice as fast (24 per cent).
The main drivers of digital growth in 2018
were bulk disbursements, which grew by 29
per cent, and bill payments, which grew by
41 per cent — a signal that mobile money
providers are becoming strong partners for
enterprises (Figure 5). Around 68 per cent
of all bulk disbursements are originated by
a business and, on average, every mobile
money provider performing business-to-
person (B2P) disbursements is connected to
237 organisations. This number of connected
organisations can be as high as 4,000 to
6,000 for the best-performing providers
(based mainly in Latin America), which can
have close to 30 per cent of their active
customer base receiving salaries digitally
through mobile money.
Meanwhile, mobile money providers
oering bill payments are connected to 102
companies on average. Bill payments are
also an eective way to digitise government
payments and increase revenues. However,
for our survey respondents, just over 17 per
cent of all bill payments in 2018 were directed
to government agencies. The opportunity is
ripe for governments to follow the lead of
private sector players in digitising payments
and revenue collection, to benefit from the
transparency, eciency and profitability that
mobile money delivers.
An enhanced customer
experience
1
19
2018 State of the Industry Report on Mobile Money
A strategic focus on interoperability
Account-to-account (A2A) interoperability,
which gives users the ability to transfer
between customer accounts held with
dierent mobile money providers and other
financial system players, continued to scale in
2018.
To lower barriers to access, mobile money
providers must continue to develop robust
interoperable payments systems that bridge
the gap between banked and unbanked
consumers and accelerate financial inclusion.
Interoperability continues to be a strategic
priority for the industry, not only to increase
the utility of mobile money for users (by
enabling the seamless movement of value
between institutions), but also to enable
increasingly important use cases, such as bulk
disbursements and bill payments, to scale up
faster.
Providers in several key markets have
expanded interoperability use cases, including
in Kenya and Ghana, bringing the total
number of markets that enable person-
to-person (P2P) transactions between
mobile money deployments to nineteen.
22
In
comparison, in 2013, this was only possible in
one market. Overall, o-net P2P transaction
volumes more than doubled from 2017 to
2018, and in interoperable markets, on-net
transaction volumes did not decline.
The agent distribution network, which has
been vital to the growth of the mobile money
industry over the last decade, shows no sign
of diminishing.
21
In 2018, the global number of
registered mobile money agents grew 18 per
cent to reach 6.6 million, 57 per cent of whom
are active on a monthly basis.
The role of the agent network is evolving
to support adjacent service oerings. An
increasing number of providers are investing
in data collection and analytics, e-learning and
technologies, including online dashboards,
mobile apps, and conversational interfaces.
In addition to enhancing user experience
and enabling greater digital inclusion, these
new services help to streamline operational
processes by upgrading agent onboarding
and training, and enhancing agent monitoring
and engagement.
$16.1 bn
Total Value
$11.1 bn
Total Value
$13.6 bn
Total Value
An overview of the mobile money ecosystem, December 2018
Figure 5.
1.3%
16.4%
9.1%
73.2%
89.2%
0.9%
2.1%
7.6%
4.5%
17.0%
67.9%
10.8%
International
remittances
International
remittances
Bulk disbursements
Bank-to-mobile
Cash-in
Incoming
transactions
Circulating
value
Outgoing
transactions
Merchant payments
P2P transfers
O-net transfers
Mobile-to-bank
Airtime top-ups
Bill payments
Cash-out
21. Juma. J. and Wasunna. N. (2018). Distribution 2.0: The future of mobile money agent distribution networks. GSMA.
22. Bolivia, Egypt, Ghana, Jordan, India, Indonesia, Kenya, Madagascar, Malawi, Mexico, Nigeria, Pakistan, Peru, Philippines, Rwanda, Sri Lanka,
Thailand, Tanzania, Uganda.
20
2018 State of the Industry Report on Mobile Money
Mobile money-to-bank account interoperability
has continued to grow significantly, increasing
by 47 per cent year on year in 2018. On average,
mobile money providers with bank integrations
are connected to 10 banks, which has dramatically
increased volumes moving between mobile money
and banking systems. Whereas a few years ago
flows into the mobile money ecosystem vastly
outweighed those going out, today they are more
balanced: a bank can now help large numbers
of MSMEs with mobile money accounts to move
money out of the system, for example, to save or
pay suppliers.
Interoperability continues to see strong growth as
the industry matures into a multi-sided financial
system oering a suite of use cases and products.
However, innovative solutions will be needed to
integrate mobile money providers with the broader
financial ecosystem. There are an increasing number
of options around central switching infrastructure
for the industry to enable nascent use cases to
scale, including merchant payments and ecient
connections to domestic and international financial
system players.
However, much of the existing bank-focused
infrastructure is not optimal for mobile money. In an
eort to solve this, MTN Group and Orange Group
launched Mowali in 2018. Mowali aims to act as an
open industry utility to facilitate interoperability
and provide the optimal technical, commercial
and governance environments in which the mobile
money industry can continue to thrive.
Expanding regional
interoperability through Mowali
In 2018, with the support of the GSMA, MTN
and Orange launched a joint venture to enable
interoperable payments across Africa. Known
as Mowali (‘mobile wallet interoperability’), the
service is open to any mobile money provider
in Africa, as well as to banks, money transfer
operators and other financial services providers.
Built on top of the Bill & Melinda Gates
Foundation’s open-source platform Mojaloop,
Mowali oers an industry-owned and industry-
governed payments hub that is technically and
commercially designed specifically for mobile
money. With its pan-African footprint allowing
for economies of scale and a cost-recovery
commercial model, Mowali has the potential
to drive down the prices of services oered
to lower-income customers. Additionally, by
creating a common mobile money acceptance
brand, and with the potential to provide one
connection for all mobile money providers,
banks, merchants and other digital service
financial providers to reach the 396 million
mobile money accounts across Africa, Mowali
aims to lay the foundation for the future of the
mobile money ecosystem.
As of early 2019, Mowali will be available to all
MTN and Orange mobile money customers in
22 of Sub-Saharan Africa’s 46 markets, with
more mobile money providers expected to join
in the next year.
21
2018 State of the Industry Report on Mobile Money
The disruptive nature of smartphones has
already transformed service models in the
communications, entertainment and transport
industries, and competition is now poised to
disrupt the traditional banking and payments
industry. Smartphone adoption is increasing
dramatically in emerging markets, especially
where mobile operators are investing heavily
in connectivity and vendors are pushing
aordable devices to market.
23
In several markets where mobile money
has scaled, users are more likely to own a
smartphone than a feature/basic phone.
24
Global smartphone adoption was 60 per cent
in 2018 and is predicted to increase to over
79 per cent by 2025. Dramatic uptake is also
expected in:
• Emerging markets: Currently at 56%, set
to rise to 78% by 2025
• South Asia: 48% by end of 2018, set to rise
to 75% by 2025
• Sub-Saharan Africa: 39% by end of 2018,
set to rise to 66% by 2025
For mobile money providers, smartphones
unlock access to a broader customer base
and allow them to oer an enhanced user
experience and a wider range of financial
products and services. To capture the
smartphone opportunity, more and more
providers are oering apps to perform
transactions. The total number of customers
using a smartphone app to transact has more
than doubled (2.6 times) year on year.
In Asia, Latin America and Middle East and
North Africa, one in three mobile money
providers that oer a smartphone app are
seeing 20 per cent or more of their active
customer base transacting through the app,
and a growing number of deployments in
Asia and Latin America are seeing over half of
transactions performed through smartphone
apps.
These deployments also have higher average
revenue per user (ARPU) as smartphone
customers typically transact twice as much
as customers using traditional feature phones
and register higher ticket sizes (owing to
typically higher incomes) — an attractive
target segment. The story is very dierent
in Africa, where over 90 per cent of mobile
money transactions are still driven by USSD.
However, with smartphones and data-enabled
devices becoming more aordable and
equipped with longer battery life, growth is
likely to accelerate.
The dramatic rise in smartphone adoption
23. Baah. B and Naghavi, N. (2018). Beyond the basics: How smartphones will drive future opportunities for the mobile money industry. GSMA.
24. GSMA Intelligence consumer survey
x2.6
The total number of customers
using a smartphone app to
transact has more than doubled
(2.6 times) year on year.
22
2018 State of the Industry Report on Mobile Money
2018 saw many non-financial players
diversify and invest in mobile-based payment
businesses in order to gain market access in
the payments space and then leverage their
experience to strengthen portfolio companies.
While this underscores the commercial
potential of mobile money, not to mention
the social benefits, it is also a sign of growing
competition.
In recent years, the share of the combined
adult population in Asia with a mobile money
account has increased rapidly. South Asia
has seen the fastest growth in the region — a
compound annual growth rate (CAGR) of 63
per cent between 2013 and 2018 — which
today means that more than a fifth of the
population has a mobile money account
(Figure 6). Meanwhile, in Southeast Asia,
account registration rates among the main
ASEAN
25
economies have grown at a CAGR
of 44 per cent, resulting in a similar adult
population penetration rate of close to 20 per
cent.
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.
Diversification of the financial
services ecosystem
25. ASEAN stands for the Association for the Southeast Asian Nations. Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam (not
included: Laos and Brunei).
2,1% 22% 3,3% 19%
CAGR
(2013-18)
63%
CAGR
(2013-18)
44%
% of adult population registered for
a mobile money account
% of adult population registered for
a mobile money account
2013 2018 2013 2018
South Asia
2
Mobile money account registration growth in Asia
Figure 6.
East Asia
& Pacific
23
2018 State of the Industry Report on Mobile Money
The looming opportunity for Asian mobile money providers
Asia’s financial ecosystem sets itself apart
by the role played by non-banks, which
constitute a significantly dierent set of
players than in markets in Sub-Saharan
Africa or Middle East and North Africa,
for example. While large MNO groups still
dominate Africa’s mobile money ecosystem,
providing an expanding range of innovative
digital solutions to more urban and tech-
savvy customers, the competitive landscape
in Asia has changed substantially. In addition
to mobile money providers, the Asian market
also hosts a sizeable number of fintechs such
as Alipay and tech giants such as Tencent.
These players have raised significant capital
in the last few years, which has allowed them
to connect with a wide variety of partners
and develop many customer-centric use
cases, including transportation and food,
medical and financial services. Alipay alone
has partnered with more than 200 financial
institutions and oers over 2,500 mutual
investment funds and is integrated with over
100,000 merchants outside China.
While mobile money providers in Asia are
connected to more online merchants than
the average global mobile money service,
deployments have fewer integrations with
companies leveraging mobile money for bill
and bulk payments. On average, Asian mobile
money providers are connected to 33 billers,
less than a third of the global average of
102, while the dierence in bulk payments is
even greater (69 versus 237). This presents a
significant and largely untapped opportunity
for Asian mobile money providers to
expand their service oering. The disparity
in bulk disbursements and bill payments is
particularly noteworthy as these services have
historically been the main drivers behind the
digitisation of mobile money ecosystems in
other markets.
With this looming opportunity in Asia,
deployments in the region stand to
benefit tremendously from increasing
their investments in mobile money and
concentrating on expanding integrations and
use cases.
24
2018 State of the Industry Report on Mobile Money
The evolving financial services ecosystem
Ant Financial.
In Southeast Asia, Ant
Financial has announced
a string of acquisitions,
including Paytm in India, Mynt in the Philippines
and bKash in Bangladesh. It has also entered
into a strategic partnership with MoneyGram,
and in Kenya partnered with Equitel and Red
Dot Payments to serve Chinese tourists in that
market. While these investments provide new
market access to global organisations, mobile-
based payment businesses also benefit. For
example, bKash, a mobile money provider in
Bangladesh, plans to leverage Ant Financial’s
investment to add capabilities around product
oering and technological enhancements like
artificial intelligence (AI).
GrabPay and
Go-Pay.
Over-the-
top (OTT) players are
expanding rapidly as
international and regional competition stiens.
Singapore-based ride-hailing giant, Grab, first
expanded into mobile payment services in 2017
with the launch of GrabPay. The mobile wallet
service is now available in major Southeast
Asian markets such as Indonesia, Malaysia, the
Philippines and Vietnam, and in early 2018, the
company purchased all of Uber’s Southeast
Asian operations. Grab’s rapid expansion
should be seen in the context of another ride-
hailing service, Go-Jek in Indonesia, which
has launched a mobile wallet, Go-Pay, and
announced a $500 million regional expansion
plan in 2018. Grab’s most recent move in digital
payments is partnering with MasterCard to
oer its 110 million+ registered users a virtual
prepaid card to enable online payments and the
possibility to cash-out.
MercadoLibre. In Latin
America, Argentina-based
MercadoLibre has become the
most popular e-commerce
platform in the region. As of 2017, the service
had 212 million registered users across 18
countries in the Americas. With its marketplace,
Mercado Pago, at its centre, MercadoLibre has
expanded into oering a range of payment
and financial services, such as credit and
wealth management, serving both MSMEs and
individual users.
Telecom Social platform
Commercial
platform
Payment
services
Non-tr
ansactional
financial services
Mobile operators
New business models emerging in the global financial services ecosystem (illustrative)
Figure 7.
Source: GSMA / Sofrecom
25
2018 State of the Industry Report on Mobile Money
Enabling regulation has a tangible influence
on the adoption and use of mobile money
services. The most successful providers
today overwhelmingly operate in markets
where regulation is enabling. Conversely,
restrictive regulatory frameworks can stifle
investment, limit the roll out of new services
and raise costs for consumers, all of which
can negatively aect adoption and activity
rates. In several cases, 2018 regulatory
developments appeared encouraging at first
glance, yet their layers of complexity reveal
increasingly restrictive requirements.
The Bangladeshi government, for example,
released a new regulatory framework in
July 2018
26
that allows non-banks, such as
NGOs, investment and fintech companies, to
participate as equity partners (maximum 49
per cent) with scheduled commercial banks.
Although a welcome concession, MNOs are
specifically prohibited from partnering with
scheduled commercial banks to oer mobile
financial services. Their role is limited to the
distribution of mobile money services as
agents or super agents.
Regulatory change also came to Indonesia
in June 2018, which despite increasing
transaction limits for deposits by unregistered
users, has so far not made the market any
more enabling for mobile money providers.
Regulations have been tightened with new
provisions for IDR 3 billion minimum capital,
limits on foreign shareholding (49 per cent)
and a mandatory requirement to link all
foreign remittance providers through the
national payments gateway.
Globally, the mobile money industry
encountered developments in five main areas
of regulation in 2018, all of which aect the
provision of mobile money services: taxation;
Know Your Customer (KYC) requirements;
cross-border remittances; national financial
inclusion strategies; and data regulation. Each
of these areas are explored in more detail
below.
Increasingly complex regulation
26. Bangladesh Mobile Financial Services Regulations (2018).
3
26
2018 State of the Industry Report on Mobile Money
Taxation
The mobile industry is already one of
the highest taxed in Sub-Saharan Africa.
Throughout the region, mobile money
providers encounter three layers of taxation:
general taxes, such as value-added taxes;
mobile sector-specific taxes, such as excise
duties on airtime usage, and mobile money
taxes.
27
In 2018, industry concerns intensified
regarding the introduction of taxes on
mobile money transactions throughout the
region and beyond. Aected markets include
Uganda, Kenya, Zimbabwe and Gabon.
Our analysis has shown that taxing mobile
money does little to support public
finances and to advance the many positive
contributions of mobile money.
28
Moreover,
excessive taxation undermines prospective
investment into mobile money, at a time when
mobile operators already face considerable
cost pressures to enhance service quality,
expand networks and meet new regulatory
requirements. As an alternative to excessive
taxation, governments should consider
supporting the growth of mobile money
services by digitising the payment of fees,
rates, taxes and levies due from taxpayers.
Mobile money taxation in Uganda
Mobile money is an accelerator for payments
and money transfers in Uganda, with over 30
per cent of the population actively using the
service and over 200,000 jobs directly created
by the mobile money industry. As a result, the
introduction of a one per cent tax on mobile
money deposits, withdrawals, transfers and
payments by the Ugandan government in July
2018 made mobile money transactions more
expensive for a significant number of users.
While the introduction of a 10 per cent excise
duty in 2013 only aected mobile money
transaction fees, this new initiative aims to tax
both the transaction fee and the transaction
value.
The new tax had an almost immediate
negative eect: the value of P2P transactions
declined by 50 per cent within two months
of implementation while the value of all
transactions dropped by around 25 per cent.
Around 100,000 agents saw their earnings
decline by 35 to 40 per cent, and around
30,000 agents went out of business completely.
Customers have resorted to using cash or
agency banking while others are transferring
smaller amounts via mobile money. This tax will
also have an impact on mobile money account-
to-bank transfers that enable commercial banks
to capture around US $19 million in deposits,
which stand to decline. Also at risk are mobile
money use cases: 60 per cent of electricity
and national water payments are made via
mobile money; around 5,000 savings and credit
cooperatives collect deposits and disburse
microloans using mobile money; 12,000 to
15,000 farmers receive daily microloans via
mobile money; and 40,000 to 50,000 transfers
are made to refugees every month.
By attempting to introduce a tax-boosting
measure to meet fiscal targets for 2018–19,
the Ugandan government has put the existing
tax base at risk. The government has since
attempted to redress the issue by reducing
the tax to 0.5 per cent of the transaction value
of withdrawals only. However, rather than tax
mobile money transaction values directly,
the government could tax mobile money in a
less punitive manner or, even better, leverage
mobile money to increase collection of existing
taxes in a digital and ecient way.
27. Muthiora, B. and Raithatha, R. (2017). “Rethinking mobile money taxation.” Mobile for Development Blog. GSMA.
28. Ibid
27
2018 State of the Industry Report on Mobile Money
Know Your Customer (KYC) requirements
Cross-border remittances
The ability to conduct KYC eciently and
eectively is key to expanding access to
mobile money. However, the mobile money
industry’s capacity to scale services is
challenged by onerous KYC requirements. To
address these challenges, providers are taking
two approaches:
• Simplifying customer onboarding:
In markets without ubiquitous
identification systems, mobile money
providers struggle to onboard prospective
customers who are unable to provide
sucient proof of identity. While ensuring
universal ID coverage remains a long-
term endeavour, a careful relaxation of
regulatory restrictions in the short term can
bring more people into the financial system
without substantially increasing risks; for
example, by using SIM registration data for
mobile money account opening. Pakistan,
Ghana, Sri Lanka and Haiti are all examples
of countries that permit the use of SIM
registration data for mobile money KYC.
• Use of digital IDs to enable electronic
KYC (e-KYC): To meet the needs of an
increasingly digitised user base, mobile
money providers — and the broader
financial services industry — are looking to
innovative technologies for ID verification,
such as queryable digital ID systems
and biometric authenticators. Some
countries, such as Kenya, have ID systems
that already oer e-KYC, and several
others are well positioned to oer such
services should governments embrace the
opportunity.
29
Mobile money remittances can be a
lifeline and vital source of income for poor
communities in developing countries.
The total value of mobile money-enabled
international remittances processed in
2018 was $4.3 billion. Results from a study
conducted in August 2017 showed that
mobile money-enabled remittance services
are available across 184 unique corridors,
and there is growing awareness among
governments, regulators and the industry
itself that mobile money can lower the costs
of sending international remittances.
The average cost of sending $200 via mobile
money is 1.7 per cent, a reduction of nearly
40 per cent since 2016.
30
Recognising the
role of mobile money in lowering the costs of
sending remittances, there has been a greater
push for interregional operating models to
ensure more people can benefit from the
cost savings. In Sub-Saharan Africa, regional
economic communities SADC, EAC and
UEMOA are leveraging the ease of movement
of people and trade by creating integrated
payments systems.
This progress in mobile money-enabled
international remittances has been facilitated
in part by regulators’ willingness to allow
market entry for non-traditional providers.
However, in many markets, regulation
remains a barrier to further expansion.
These challenges are dierent from country
to country, ranging from the acquisition of
a license that allows mobile money to be
used for international remittances, to more
complex issues that can hamper the opening
of new corridors such as data localisation
requirements, or dierences between
international and domestic KYC requirements.
Against this backdrop, establishing an open
and level playing field and encouraging
competition through conducive regulation
will be crucial in unlocking the full potential of
mobile money for international remittances.
29. Naghavi, N. (2019). Competing with informal channels to accelerate the digitisation of remittances. GSMA.
30. GSMA (2017). Working Paper: Guidelines on International Remittances through Mobile Money.
28
2018 State of the Industry Report on Mobile Money
National financial inclusion strategies
Data regulation
Governments across developing economies
have initiated policy reforms to improve the
quality, access and availability of financial
services through national financial inclusion
strategies (NFIS). An NFIS sets milestones
and defines roadmaps for public- and private-
sector stakeholders to achieve financial
inclusion targets. As of December 2018,
36 countries have adopted an NFIS, and
Jordan, Palestine and Russia are planning
to launch their strategies within the year.
A good NFIS is regularly reviewed against
defined objectives and updated within agreed
timelines, as Tanzania demonstrated in 2018.
31
Other qualities of an eective NFIS include
technology neutrality, gender inclusion and
proportionate regulation.
For mobile money providers, customer
data provides an important opportunity
to diversify and improve service oerings,
bridge the financial inclusion gap and
ultimately boost profits. At the same time,
these developments inevitably increase
the risks of data breaches and reputational
damage, so maintaining consumer confidence
in mobile money services is vital to leverage
new commercial opportunities and safeguard
broader financial inclusion eorts.
Mobile money providers will need to consider
recent changes in data protection regulation
that may have an impact on the provision of
mobile money services, particularly relating
to data localisation, data security, the lawful
basis for data processing and data sharing.
For example, data localisation requirements
stipulate that customers’ personal data
collected within a particular jurisdiction
must be stored or processed within that
jurisdiction’s boundaries, which may result in
prohibitive costs for providers, disincentivising
market entry and compromising innovation.
For regulators, the challenge of strengthening
data protection without stifling innovation
requires collaboration with industry players to
strike the right balance.
31. The Alliance for Financial Inclusion (2018). Tanzania: National Financial Inclusion Framework 2018-2022.
29
2018 State of the Industry Report on Mobile Money
100100
The Mobile Money Regulatory Index
The Index comprises six dimensions and 27
indicators weighted by impact. These six
dimensions, or enablers, have the biggest
influence on the development of scalable and
responsible mobile money businesses that
can sustainably reach the underserved and
foster digital financial inclusion. They include:
Authorisation, KYC, Consumer Protection,
Agent Networks, Transaction Limits, and
Investment and Infrastructure. The Index
also provides a foundation for public- and
private-sector dialogue on reforms that
can promote market growth. For instance,
data on transaction limits could be used to
set appropriate transaction limits for entry-
level accounts based on global benchmarks
extracted from the Index.
Pakistan
Authorisation: 75.53
Consumer Protection 72.5
Transaction Limits: 84.1
KYC: 70
Agent Network: 93.33
Infrastructure and
Investment environment:
Regulatory Index Score:
80.65
The fast-evolving regulatory landscape calls
for a more nuanced evaluation of regulatory
frameworks, which extends beyond a binary
categorisation of regulation as enabling or non-
enabling. Recognising this, over the last year,
the GSMA has studied regulatory frameworks in
more than 80 countries and developed a tool,
the Mobile Money Regulatory Index, to assess
the eectiveness of regulatory frameworks
in creating enabling environments for mobile
money operations (Figure 8). The Index
provides regulators and other stakeholders
with insights into improving their regulatory
environment and ultimately expanding mobile
money services. Figure 8 provides an example
of a country's Regulatory Index Score and
composite dimension scores.
The Mobile Money Regulatory Index
Figure 8.
100
30
2018 State of the Industry Report on Mobile Money
Mobile money providers responding to our
Global Adoption Survey reported steady
year-on-year revenue growth (23.9 per cent
on average) and profitability (30 per cent of
providers reported EBITDA margins of over
25 per cent). However, with close to 80 per
cent of providers reporting that most of their
revenues are driven by customer fees, they
are increasingly seeking to strengthen their
value proposition to meet the evolving needs
of individuals and small businesses.
This has moved us towards a significant
evolution of the mobile money business
model: a 'payments as a platform' approach
that connects consumers with third-party
services across a range of industries.
Recognising the compelling opportunity to
increase and diversify revenue streams and
reach new and broader customer bases,
providers are seeking to develop a diversified,
multi-sided model of adjacent services,
enterprise solutions and personalised services.
Expansion of the mobile
money value proposition
79%
46%
26%
Growth in e-commerce
transactions facilitated by
mobile money
Customer activity rate among
providers oering a credit, savings
or insurance product (compared to
26% customer activity rate among
providers who do not)
Mobile money deployments
for whom building enterprise
solutions is a strategic
priority
24%
Dierence in ARPU for providers with
a credit, savings or insurance product
compared to providers without
4
The expanding mobile money proposition
Figure 9.
31
2018 State of the Industry Report on Mobile Money
Enterprise solutions
E-commerce
While only a few mobile money providers
have developed a customised oering for
businesses, they are well placed to serve
MSMEs thanks to their strong presence
on the ground. Despite being tailored for
individual needs, GSMA research in two
Sub-Saharan African countries has found
that approximately 80 per cent of MSMEs
have a mobile money account and, of these,
83 per cent were using it for business needs.
MSMEs reported performing transactions
more frequently than individual mobile
money users, with over three in ten receiving
payments several times a day for a variety
of use cases, including receiving customer
payments and paying utility bills and
suppliers.
32
More and more customers are coming online.
In just four years, global mobile internet
penetration has risen sharply, from 29 per
cent in 2013 to 43 per cent in 2017, and is
projected to increase to 61 per cent by 2025.
In Sub-Saharan Africa, this has risen even
faster, doubling in the last five years to 21 per
cent. An additional 280 million subscribers
are estimated to come online between now
and 2025. South Asia has seen similar growth,
with subscribers doubling over the last five
years and another 470 million users expected
by 2025.
In 2018, e-commerce transactions facilitated
by mobile money grew 79 per cent in
value. This strong growth has meant more
integrations are happening directly between
operators and providers or through gateways.
Operators are also looking to launch their own
marketplaces, such as Safaricom with Masoko
(see below).
Masoko by Safaricom
Launched in November 2017, Masoko became
the first e-commerce platform in Africa to
be launched independently by an MNO. The
platform has allowed Safaricom to leverage
the reputation and trust of its highly successful
mobile money service, M-Pesa. At a time when
MNOs around the world are seeking to digitise
their operations, Safaricom has put its focus on
e-commerce, with Masoko now an integral part
of its plan to sustain future growth.
As a mobile money provider, Safaricom brings
several unique strengths to the e-commerce
domain. For example, while Safaricom oers
several payment methods other than M-Pesa
(such as VISA and MasterCard), Masoko does
not oer the payment option of cash on
delivery. As a payment service provider itself,
Safaricom can guarantee payment for an order
the moment it is placed — a core added value.
Another strength is its unique data capabilities
and insights, which allows it to oer customers
a more relevant and tailored experience online.
As of November 2018, Masoko had 120
(pre-approved) active vendors and oered
over 30,000 products or stock-keeping
units (enhanced by the recently launched
Masoko Fresh, a new part of the portal that
oers delivery of fruits, vegetables and dairy
products). As in other developing countries,
Safaricom’s main e-commerce challenge has
been logistics. The MNO is addressing this by
using its sizeable agent network (160,000+)
as delivery and collection points, as well as
multiple delivery partners. This has been a
success; Masoko is now delivering products to
45 of 47 counties in Kenya.
32. Pasti, F. and Nautiyal, A. (2019) Addressing the financial services needs of MSMEs in Sub-Saharan Africa. GSMA.
32
2018 State of the Industry Report on Mobile Money
Credit, savings and insurance
While financial account ownership has seen
remarkable growth in recent years, little
progress has been made in access to savings,
credit and insurance services. By oering
adjacent services such as credit, savings,
insurance and wealth management, mobile
money providers better serve the varied
needs of their customers while reducing their
reliance on revenues from customer fees.
In 2018, providers increasingly embraced
this opportunity. Currently, 23 per cent of
providers oer a credit service through
partnership models with banks or credit
providers, and 41 per cent are planning
to launch one in 2019. Several of the
deployments that launched a digital credit
oering in the last 18 months saw an average
of 11 per cent of their registered customer
base take out digital credit loans.
Our survey also showed a healthy appetite
among mobile money providers to oer
insurance; at least 45 per cent of providers
currently oer an insurance service or are
planning to launch one in the next 12 months.
The platform-based approach is uniquely
positioned to facilitate this, as it involves a
shift from one-on-one negotiations and one-
o integrations to a platform that is open
to all potential third parties that pass the
required checks. As a result, smaller financial
institutions and microfinance institutions
(MFIs) with a more niche focus will also be
able to oer their services to mobile money
users.
Providers stand to benefit from expanding
their value proposition to adjacent services
in two key respects. First, mobile money
providers that also oer savings, credit or
insurance products have on average 24 per
cent higher ARPU than providers that do
not oer any of these products. Second,
the same providers are also likely to have a
higher activity rate (45.7 per cent) than those
who do not (27.0 per cent). The synergies
created by oering these products are just
as significant as the increased direct revenue
opportunities; these new services will help
providers acquire new customers, reduce
customer churn and cross-sell services.
Mobile money providers already possess the necessary skills and resources to move towards
a platform-based model. However, to transition fully and position themselves strategically
for simple integrations and quick access to customers, providers will need to address several
key organisational and technological challenges.
33
These include empowering third parties to
directly embed and implement their catalogue of services through mobile money apps, and
leveraging their datasets eectively and responsibly to glean insights from new usage patterns.
33. Nika Naghavi (2018). Embracing payments as a platform for the future of mobile money. GSMA.
33
2018 State of the Industry Report on Mobile Money
Conclusion
2018 State of the Industry Report on Mobile Money
34
The enduring strength of the agent network, an
increased focus on interoperability and widespread
access to digital tools such as smartphones will help
to further ease this transition. The merchant network
will also become increasingly important as mobile
money providers connect customers to MSMEs,
both retail and online. Smartphones will be a key
enabler of this model as they provide an enhanced
user experience and open access to a wider range of
financial products and services through third-party
apps. In countries where feature phones are still
the primary channel for accessing mobile money,
however, providers will need to determine how to
oer the core benefits of the platform model to this
enduring customer segment.
As in previous years, regulation designed to enable
low-cost services for the financially excluded has
proven essential to the success of mobile money.
There were some encouraging trends in financial
services regulation in 2018 as national financial
inclusion strategies gained momentum and
collaborative sub-regional initiatives worked to
create integrated payments systems. However, two
major regulatory risks to financial inclusion emerged
in 2018: higher taxation of the mobile industry across
Sub-Saharan Africa and the global emergence of
potentially restrictive data protection requirements.
Ultimately, regulation should help to build consumer
confidence in engaging with digital services without
creating significant additional costs for service
providers. Communication and collaboration
between mobile money providers and regulators will
be vital to strike he right balance between service
provision and cost.
As the 'payments as a platform' approach takes
flight, providers will be able to glean insights from
new usage patterns and data, tap into new revenue
sources and concentrate on building a robust
platform and innovative ecosystem. It will be critical
that commercial use of this data is balanced with
concerns about data privacy, data security, fraud
prevention, regulatory compliance and consumer
trust. For any new product or service, providers
should establish clear and open processes and rules
for data security, storage, consent, minimisation,
anonymisation and sharing.
Improving access to credit for the underserved also
raises questions about responsible lending, which
will need to be addressed. Namely, how can lenders
ensure that more widespread access to credit does
not lead to an increase in over-indebtedness? And
how can financial education, by lenders, mobile
money providers, regulatory authorities and the
wider ecosystem, help to address this?
Laying the groundwork for the financial services
ecosystem to grow around the mobile money
platform is essential, but the 'payments as a
platform' approach is not only about incorporating
more partners and third parties. It is also about
deepening engagement with individuals and
businesses through a smooth end-to-end experience
that ultimately encourages greater uptake and use
of mobile financial services moving us closer toward
the end goal of universal financial inclusion.
2018 saw the industry shift its focus to meet
evolving customer needs, with more industry
players embracing a platform-based approach
connecting consumers with third party services
across diverse industries.
Conclusion
35
2018 State of the Industry Report on Mobile Money
gsma.com/sotir
2018 State of the Industry Report on Mobile Money
36
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