For the mobile money industry to succeed in south africa there are few things that need to be fixed. According to mastercard, africa is taking the lead in the market. Mobile money services are available in all four markets, and some have gained significant traction over the past few months. There is particular concern about the impact on somali money transfer sector. Many economists cite safety, efficiency, transparency, and ease of the services as reasons for the. As many as 30% of cell phone users in africa report that they participate in mobile banking a new report from the pew research center shows the transformative power of the cell phone in the worlds fastestgrowing market for mobile technology. Africa is the global leader in mobile money, which has become an important component of africas financial services landscape. As a money services business operating under the category of transfer of funds, worldremit inc. Mobile money in africa mobile money and related financial services are continuing to see rapid growth in africa, and are of major interest to a number of businesses in the region from financial institutions and technology firms through to governments. The mobile phone revolution and the rise of mobile money, especially in east africa with platforms such as mpesa, has changed this. It further examines different regulations that have. There are limited alternatives for channeling funds to somalia, in the absence of an established banking system and there is concern about the possible impact on livelihoods of any major disruptions to remittance mechanisms. According to the tax proposals contained in the excise duty amendment act 2018, a tax of 1 per cent of the value of the transaction will apply on mobile money transactions on receiving money, making payments and withdrawals of money.
What 1% new tax on mobile money transactions means. Pdf in developing countries, specifically in subsaharan africa, mobile money comes with huge benefits to users by facilitating users to better. Establish a minimum control standard for operation of mobile money. Send money to african mtn mobile wallets worldremit. Mobile financial services mfs have become increasingly popular across the continent for many reasons. Across all countries, both in west africa and east africa, women are less likely to hold accounts either mobile money accounts or accounts at a financial institution than men, and mobile money usage within rural areas is greater than among the poorest 40% of the population global findex, 2014. Ghana is the fastest growing mobile money market on the african continent owing to a number of initiatives being implemented by the government, m. Government is proposing a new tax on mobile money transactions. Jan 22, 2015 the world economic forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. In 2007, safaricom, a kenyan mobile communications operator, launched a more mature service called mpesa. Mobile money services regulation and creating an enabling. Pdf on dec 1, 2012, lassaad lachaal and others published mobile money services, regulation and ecosystem in africa find, read and cite all the research you need on researchgate. Across subsaharan africa as a whole, mobile money revenue rose by 27% between september 2015 and june 2016, and operators saw mobile money contributing increasingly to overall company revenues. The success of mobile money services mms has led many mobile network operators mnos around the world to venture into offering similar products, thus making revenue streams within the mobile environment incredibly competitive.
Mobile money africa africas leading resource for digital. Fx sell back is a challenge in restricted currency markets. Mobile money in subsaharan africa and its implications 2 january 29, 2016. The case of kenya, ghana and nigeria conference paper pdf available may 20 with 4,450 reads how we measure reads. Mobile money markets are hugely popular in africa, offering easy, secure methods of payment and transfer of funds using simple textbased mobile technology. Currently mobile money is regulated by central banks and telco regulators. Jul 11, 2017 subsaharan africa has 140 mobile money services in 39 countries, or over half of the 277 total services globally, as of december 2016, according to the gsmas state of mobile money in subsaharan. Subsaharan african will have 500m mobile users by 2020. The partnership for financial inclusion, launched by the two institutions in 2012, had delivered 7. In africa, only 20 percent of families have bank accounts. May 19, 2014 may 19 mobile money has changed from being a fad into a fullblown industry. The paper focuses on innovative mobile phones money and banking options in four african countries kenya, nigeria tanzania an d uganda. The case of kenya, ghana and nigeria conference paper pdf available may.
In some parts of the world, such as the philippines, brazil and africa, mobile banking is already flourishing. The reasons for not having a bank account is the lack of money to use one, bank accounts are too. Orange money is a real contributor to socioeconomic development in africa and is a key part of our multiservice operator strategy to be a partner for transformation in africa and the middle east. Challenges for the somali money transfer sector rift. May 19 mobile money has changed from being a fad into a fullblown industry. It highlights differences among the 4 countries and their financial regulatory environment. Lessons for west africa international growth centre. Managing money, sending money to family, paying for living expenses and receiving a salary via a mobile phone all enable communities to progress. Worldremit south africa pty ltd is a company registered in south africa with registration number 201524056207. Pioneers of mobile money and agent banking, like baobab, have been strengthened by a joint initiative of ifc and the mastercard foundation. This graph shows mobile money deployments in subsaharan africa with activity rates 2% calculation. Tanzania is rapidly taking up digital financial services including mobile money with higher monthly transactions of 95 million compared to kenyas 93 million transactions.
The conversion of cash into electronic value and vice versa happens at retail stores or agents. Research report making sense of mobile money in urban ghana. Africa is currently rising as a major area where mobile money is spreading. Go to any surviving book shop in any european or north american city and ask for the section on african authors. The growth of mobile money in africa the borgen project. Central banks could look at regulating the mobile money business of telco. Integrating mobile infrastructure and processes to organisation infrastructure and processes article pdf available april 20 with 9,146 reads how we. But in the united states, only about 10 percent of consumers about 1. Apr 17, 2018 government is proposing a new tax on mobile money transactions.
How mobile money is transforming africa world economic forum. Pdf regulatory frameworks and implementation patterns for. A different approach to mobile money in africa the economist. Nowadays, the mobile money services, including mobile payments, are developing very fast in africa, comparing not only to other developing countries but also. Tanzania also has more mobile money agents compared to kenya with a total of 32. Mobile money is a mobile payments system based on accounts held by a mobile operator and accessible from subscribers mobile phones. Africa mobile money is a mobile payments system based on accounts held by a mobile operator and accessible from subscribers mobile phones.
Africas plight salary banking sector same day out bank fees for deposit and withdrawals fee structure is a disincentive to leave money in bank deposit fees prevent banks from getting cheap capital making money with the interest rate spread why would informal businesses or poor people put money into an account if charged for depositing and. Regulatory impact on mobile money and financial inclusion. Regulatory frameworks and implementation patterns for mobile money in africa. Apr 16, 2015 as many as 30% of cell phone users in africa report that they participate in mobile banking a new report from the pew research center shows the transformative power of the cell phone in the worlds fastestgrowing market for mobile technology. Mobile money in africa mazars financial services blog. Pdf the aim of this study is to assess mobile money services market developments in africa in recent years in comparison to other parts of the. The top 7 african countries for mobile money infographics. The guidelines were developed in consultation with the uganda communications commission ucc, the private sector and other relevant stakeholders. Regulatory impact on mobile money and financial inclusion in. Why mobile money is big business in africa world economic forum.
Over 90% of mobile money transactions in subsaharan africa are still processed via ussd dramatic uptake in smartphone adoption and mobile internet is on the horizon. Share of adults using mobile money in africa by region. I have compiled a short list of some of my observations so far. Pdf regulatory frameworks and implementation patterns.
Mobile money on the rise in africa as millions get phones. The findex survey said while mobile money has been centered in east africa, the 2017 update reveals that it has spread to west africa and beyond. Africas unbanked majority needs access to affordable tools for savings, loans, and credit. Mobile money in africa is currently in use in 36 of the 47 countries in subsaharan africa, and is used prominently throughout east africa. State of the mobile money industry in subsaharan africa gsma. Key concerns in domestic wallet creation of emoney establish tight controls around creation and distribution of emoney trust account trust account balance must match the balance in the mno mwallets protect the mobile wallet holder funds protect money supply from being affected by emoney trust account mno the banks need to adhere to domestic and international regulations. State of the mobile money industry in subsaharan africa. To compete in africas diverse mobile money markets, banks must offer distinctive mobile and digital services not only in payments and deposits, but across the spectrum of financial services. This statistic presents the share of adults using mobile money in africa in 2014, by region.
Orange money, emblematic business activity for the group. Mobile money has essentially become a household service in tanzania. Mpesa, a leader in the industry, celebrates 10 years of dominance in countries such as kenya and uganda. Transfer market a different approach to mobile money in africa. For instance, in kenya, mpesa recorded revenues of around usd 530 million in 20162017, representing 27% of safaricoms total revenue. Cote divoire, the leading mobile money market, had five deployments and close to 6. The shop assistant will look bemused and probably send you. The report africa mobile money market by transaction mode nfcsmart cards, direct mobile billing, mobile webwap payments, sms, stkussd, and others, nature of payment, location, type of purchase, and by country forecast to 2020, defines the africa mobile money market based on various transaction modes, nature of payments, location types, and types of purchases with an indepth. Low levels of financial inclusion represent a barrier to socioeconomic development in developing countries. All transactions are authorised and recorded in realtime using sms in 2009, gsma made a grant to safaricom to support the development of a social transfer. If one were to paint a picture of the kenya that most of the world is familiar with, it would likely include the wildlife landscapes like the maasai mara national reserve, where youre guaranteed to see some of the big five, including lions, leopards, and elephants. Sep 25, 2015 the latest mobile money statistics indicate that users in east africa have largely continued to shift gdp to be transferred via various mobile money platforms.
Mobile network operators mnos have dominated mobile money services in africa for the past decade. Africa s plight salary banking sector same day out bank fees for deposit and withdrawals fee structure is a disincentive to leave money in bank deposit fees prevent banks from getting cheap capital making money with the interest rate spread why would informal businesses or poor people put money into an account if charged for depositing and. African mobile money story is known to have started in kenya in 2007 when. Kiep world economy update backgrounds the first mobile money service was launched in south africa in the year 2000.
Mobile money in subsaharan africa and its implications. The world economic forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. Sep 19, 2014 africas unbanked majority needs access to affordable tools for savings, loans, and credit. Subsaharan africa has 140 mobile money services in 39 countries, or over half of the 277 total services globally, as of december 2016, according. According to the 2015 global index report by the world bank, the countries whose penetration rate for mobile money accounts was over 10% were all located in subsaharan africa. Since then, the mobile money industry has rapidly expanded, particularly in developing economies in africa and south asia such as india, bangladesh, and pakistan. Ghana is fastest growing mobile money market in africa. Presentation mobile banking and mobile money development in. Mobile money in subsaharan africa and its implications by. Financial inclusion enabler itut technology watch report may 20 globally, more than 2.
In africa, the dwindling revenues in the mobile telephone voice business as. The second is the need to lower the costs and risk of retail and trade based primarily on cash. More recently, fintechs have established a solid footing in the market, and a number of banks are beginning to compete aggressively for the mobile banking customer. Mobile money in uganda international growth centre. Incorporated as a notforprofit foundation in 1971, and headquartered in geneva, switzerland, the forum is tied to no political, partisan or national interests. Telcos chamber denies seizure of deceased momo users account by telcos. Pdf mobile money services, regulation and ecosystem in africa. The use of cell phones to transfer money in modern africa. Associate professor department of african american studies virginia commonwealth university 816 west franklin street, p. Across all countries, both in west africa and east africa, women are less likely to hold accounts either mobile money accounts or accounts at a financial institution than men, and mobile money usage within rural areas is greater than among the poorest 40% of. The majority of these people are rural dwellers in developing countries.
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