Revenues from mobile money transfers to reach in excess of $4 billion in three years
Africa is the leading market for mobile money transfer services globally, according to new research. The study from Juniper Research shows that in total there will be $2 billion in revenues forecast for mobile money transfer services this year and $4 billion annually in 2018.
Several African mobile operators, such as Vodacom Tanzania and MTN Uganda, are now generating more than 10% of their revenues from mobile money. Meanwhile, Safaricom’s MPESA service, the trailblazer in the sector, recorded mobile money revenues of more than $330 million in the latest financial year, making it the most successful mobile or online money transfer service worldwide.
The research shows that recent surges in both transaction volumes and values are being driven by increased implementation of both cross-border and intra-national remittance interoperability. The research cited the traffic uplifts engendered by recent agreements between Safaricom and MTN (for the Rwanda-Kenya corridor) and by national interoperability agreements in markets such as Tanzania and Pakistan.
Also, there has been a shift in service provider requirements, with the majority now seeking to deploy smartphone applications in tandem with unstructured supplementary service data (USSD) and interactive voice response (IVR) mobile money solutions, thereby future proofing them in anticipation of greater medium term smartphone adoption.
However, the research cautioned that while inadequate regulation still constrained growth in a number of markets, in many cases low adoption or activity rates could be attributed to poor decision making by service providers.
According to research author Dr Windsor Holden: “There are too many instances where service marketing is inappropriate or incorrectly targeted; where the message simply isn’t reaching the desired audience.”
The research also observed that in Nigeria, a number of services had failed to gain repeat usage because of the high cash-out fees, while savings accounts in other markets had withdrawal fees that were inappropriate for low income users and savers.