Base station. (Duncan Alfreds, Fin24)
Harare – The value of mobile money transactions in Sub Saharan Africa surged to $656m in 2014 and could more than double to $1.3bn in the next four years, according to researchers.
Mobile money systems such as M-Pesa in Kenya and EcoCash in Zimbabwe have taken off and are projected to mature beyond person-to-person transactions, according to experts.
Mobile companies in the region are also increasingly tapping into M-Pesa-type systems to broaden their revenue streams, analysts say.
Frost and Sullivan ICT analyst, Lehlohonolo Mokonela, said on Tuesday that mobile network operators (MNOs) in the region are increasingly "taking advantage of the growing popularity of mobile money to boost average revenue per user and counter the increasing pressure on voice” revenues.
This is according to the research firm’s report called ‘Analysis of the Mobile Money Market in Sub-Saharan Africa—Selected Countries’.
“The (mobile money) market earned revenues of $655.8 million in 2014 and estimates this to reach $1,319.8 million in 2019,” said Frost and Sullivan.
The report said there has been a rise in the adoption of mobile banking services in the region as the majority of citizens in African countries have limited access to traditional banking services.
The expansion of mobile infrastructure and the availability of affordable smart devices will also increasingly entrench usage of mobile money services.
Governments in the Sub-Saharan Africa region are also being urged to recognise the key role of mobile money platforms in improving “financial inclusion” in the region.
The Frost and Sullivan report added that governments in the region should consequently “create an enabling environment for MNOs to deliver mobile money services for the large unbanked and underbanked population”.
Although the take-off of such platforms has been touted as successful, experts say the “lack of interoperability and restrictions on cross border transactions are limiting the volume of mobile money transactions”.
Additionally, limited mobile infrastructure and poor-quality networks are limiting the availability and reliability of mobile money, according to the report.
However, some regulators and central banks in the region are starting to ease-up on cross border remittances, with Safaricom recently being granted a licence to process transactions into other countries in the region by the Central Bank of Kenya (CBK).