Mobile money services are now available in 61% of the world’s developing countries (85 of 139 markets), according GSMA’s latest report.
The GSMA, which is an association of mobile operators and related companies devoted to supporting the standardizing, deployment and promotion of the GSM mobile telephone system noted that in the past five years, mobile money services had spread across much of Africa, Asia, Latin America, Europe and the Middle East.
In its latest report entitled: ‘2014 State of the Industry Mobile Financial Services for the Unbanked’ it revealed that as of December 2014, there were 255 live mobile money services in 89 markets compared to 233 live services across 83 markets at the end of 2013.
Whilst Sub-Saharan Africa still accounts for the majority of live services globally (53%), half of all launches in 2014 occurred outside the region, with Latin America & the Caribbean, East Asia & Pacific and South Asia all seeing 3 new launches, respectively.
Today, Europe & Central Asia is the only region with more planned than live mobile money services, the report noted.
It stated: “Now that mobile money is maturing across many developing regions, the number of new launches each year is falling steadily. 22 new services launched in 2014, compared with 59 launches in 2013 and 58 launches in 2012.
Mobile money was rolled out in six new markets this year – Dominican Republic, Myanmar, Panama, Romania, Sudan and Timor-Leste – compared to 11 new markets in 20133 and 14 in 2012”.
Globally, as the number of players in individual markets increases, competition is intensifying. Worldwide, 56 markets now have at least two live mobile money services, and 38 of these markets have three or more live services.
As markets become increasingly competitive, mobile network operators (MNOs) are showing a growing interest in the development of interoperable solutions. They are beginning to consider the benefits of account to-account (A2A) interoperability, both in terms of increasing transaction volumes and revenues, and in terms of improving the customer experience by making it easier for consumers and businesses to send money domestically across networks.
In 2014, according to the report MNOs interconnected their services in three markets – Tanzania, Sri Lanka, Pakistan – following in the footsteps of MNOs in Indonesia, where domestic interoperability was implemented for the first time in 2013.
In addition, operators in six other markets have already committed to interconnect their services. As industry knowledge on how to implement A2A interoperability increases, this trend is likely to continue.
Barriers
An analysis of developing economies where mobile money is yet to launch suggests there are two prevalent reasons for this – challenges to building a solid business case due to addressable market size and territory size, and regulatory hurdles.
Today, 54 developing countries do not have a live mobile money service. 70% of these countries have a population of less than 10 million, the report indicated.
A small addressable market size makes it harder to build a business case for investment in mobile money, since it is more difficult for a mobile money service provider to achieve scale, lower costs and reach profitability.
In addition, many of these markets are small territories, where it can be harder to build a peer to peer (P2P) use case. While this doesn’t mean that mobile money cannot succeed in these countries, these factors seem to reduce the appetite of operators and banks to invest in mobile money launches.
Just 13 of the 54 developing markets where mobile money services are not yet available have a population of over 10 million.14 launches are planned in these 13 markets, indicating a high level of interest from mobile money providers. However, in most of these countries, the regulatory approach appears to be slowing down the launch of services, according to the report.
African Eye News.com
