State of the Industry Report on Mobile Money of the GSMA

COVID-19 impact: financial digital transformation accelerates
April 15, 2020
Webinar: Digital financial services during and after COVID-19
May 28, 2020

State of the Industry Report on Mobile Money of the GSMA

At the end of March 2020, the GSMA published the State of the Industry Report on Mobile Money 2019*. The document addresses the trends and initiatives of the mobile money industry that generate better benefits for society and make it possible to move a step closer to a digital future. We hereby share some of the main aspects and data that we consider important to highlight.

Beyond one billion mobile money accounts: a step towards a digital future for all.

The report points out that 2019 marked a key milestone for mobile money, with more than 1 billion accounts  registered worldwide. This is valued as a tremendous achievement for an industry that is just over a decade old.

“Total transaction values grew by 20 per cent, reaching $690 billion in 2019, which means the industry is now processing close to $2 billion a day”, the report reads. GSMA forecasts that in 2023 more than $1 trillion will be transacted via mobile platforms annually, with over $2.8 billion a day.

Growth and globalization.

Mobile money, which was originally used in a few markets, has become a global phenomenon. “With 290 live services across 95 countries,” as GSMA explains, this means of payment is entering the mainstream in most markets where access to financial services is limited. 

“Mobile money services are available in 96 per cent of countries where less than a third of the population have an account at a formal financial institution.” “In most low-income countries, the path to financial inclusion is primarily through mobile money.”

More value is circulating in the mobile money system, rather tan exiting

“For the first time in 2019, digital transactions represented the majority of mobile money flows, and more value is circulating in the mobile money system than exiting”, states Mats Granryd, GSMA Director General. “The total value in circulation (P2P and merchant payments) reached $22 billion in December 2019, more than doubling over the past two years and significantly surpassing the total value of outgoing transactions ($18 billion)”. 

The ratio of digital to cash-based transactions  has increased by nearly 50 per cent over the past 3 years. This figure shows how every year digital transactions are adopted by more and more people as part of their daily life.

P2P (peer-to-peer transfers), IR (international remittances), B2M (bank-to-mobile transfers), Bill (bill payments), Bulk (bulk disbursements), M2B (mobile-to-bank
transfers), MP (merchant payments), ATU (airtime top-ups).

Increasing user trust and relevance in the use of mobile money.

In 2019, customers used their mobile money accounts more often and as part of their daily activities, signalling that the confidence in the system has increased. At the end of the year, 372 million accounts (35.8 percent of all registered mobile money accounts) were actively used on a 90-day basis, and 70 percent of these ,on a 30-day basis (the latter being than 261 million accounts).

Investment in distribution chains and the sustainable income of agents.

According to the GSMA report, “the mobile money industry has created opportunities for entrepreneurs in emerging markets to become agents. The number of agent outlets has almost tripled over the past five years, and the reach of a mobile money agent is now 7 times that of ATMs and 20 times that of bank branches”. 

In rural and similar areas, mobile money agents have had a positive and transformative impact towards financial inclusión.

In addition, agents benefit from a substantial increase in their monthly income, thanks to commissions. Since most of thems operate a micro-retail business in addition to their mobile money one, they use that reliable and stable  income to improve or distribute costs among their businesses. This demonstrates the contribution of the mobile money industry, both direct and indirect, towards new income creation.

Interoperability and Integration.

International mobile financial services and APIs integration with organizations such as government agencies, online businesses and  local entrepreneurs, have made it possible, in 50 percent of the markets (48 out of 95), for customers to transfer money between accounts of different providers or with other players of the financial system.

In this context, international remittances have increased significantly: $7.3 billion were processed in 2019, compared to $5.5 billion in 2018.

Mobile-to-bank interoperability and the value of transactions from bank-to-mobile-money account also increased compared to previous years. This suggests that mobile money is complementing the formal banking sector while also meeting the needs of entirely new customer segments, including those traditionally cash-reliant and unbaked.

This report shows the progress that has been made so far and the potential that mobile money has for the development of society in various aspects. More women are using financial services, low-income households are accessing essential utility services and smallholder farmers are getting paid more quickly and conveniently. Meanwhile, millions of migrants and their families are experiencing the life-changing benefits of faster, safer and cheaper international remittances and humanitarian cash assistance is being delivered more thoughtfully to those in crisis situations. “Mobile money is helping millions meet their basic daily needs and improve their livelihood”, according to Ruan Swanepoel, Head of Mobile Money, GSMA.

*This report is published every year by the Mobile Money Programme of the GSMA, which objective is to work for the acceleration of the development of the mobile money ecosystem for the unbanked. 

Read the full report here: https://www.gsma.com/sotir/wp-content/uploads/2020/03/GSMA-State-of-the-Industry-Report-on-Mobile-Money-2019-Full-Report.pdf