banner
Mobile money, users on the rise in emerging markets
Mobile money, users on the rise in emerging markets
Fintech

Mobile money, users on the rise in emerging markets

By Eleonora Spagnolo - 30 Nov 2020

Chevron down

The number of users using mobile money systems (via smartphones) in emerging markets will exceed 1.2 billion by 2025. This figure will rise from 980 million today, accounting for 30% of all mobile phone users in emerging markets.

This is revealed in a report by Juniper Research.

Growth will be driven by the use of P2P and payment systems. But for this to happen, financial system providers such as banks, for example, need to enter into partnerships to offer products that are sophisticated and therefore attractive. 

Nick Maynard, one of the authors of the research, explains:

“‘Mobile money providers’ strong position is under threat, as financial literacy and smartphone penetration grow. Mobile money services must rapidly evolve, or they will lose relevance. The payments-as-a-platform model offers the opportunity for mobile money vendors to become ‘super apps,’ and agreeing partnerships now will be critical in achieving this”.

According to the research, this could only be a first step, because afterwards users could learn how to use microfinance systems like:

  • Microcredit;
  • Microsaving;
  • Microinsurance.

The research estimates that users of these services will grow from the current 227 million to 336 million in 2025. 

The more competitive the market becomes, the more providers will want to offer better services beyond simply sending and receiving money. Analyzing user activity data will be key to understanding user preferences and developing the best products. 

What is mobile money?

Mobile money is the system that allows users to receive, store or spend money directly via smartphone. In an even broader sense, Mobile money also means the control of one’s own money via smartphone as well as the control of one’s current account via home banking app.

Mobile money is also referred to when using smartphone payment systems. (such as GooglePay or ApplePay). Another similar service is for example WeChat Pay.

Mobile money systems are very effective especially in emerging economies where unbanked people live. The unbanked are those who don’t have a bank account.

One of the first mobile money systems was MPesa. It was born in Kenya from Safaricom, a mobile company affiliated with Vodafone, and allowed people to send money via mobile phone, transforming the mobile phone connected to a sim card into a wallet. The service has since expanded into other markets.

Since 2007, the year MPesa was founded, the world of mobile money has been evolving, and as research shows, it is destined to grow further.  

 

Eleonora Spagnolo
Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

We use cookies to make sure you can have the best experience on our site. If you continue to use this site we will assume that you are happy with it.