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The Digital Financial Services Guide
December 2018
The pioneer of mobile money, Sub-Saharan
Africa, still leads the space, accounting for almost
half of all registered customers globally. Last
year, mobile money transactions in Sub-Saharan
Africa reached $19.9 billion or 63 per cent of
the global figure and represented two-thirds of
the total transaction volume.
Ten years ago, a prominent telecom operator
launched mobile money in Africa. This has,
needless to say, transformed the African
economy. In areas with low levels of bank
usage, mobile money provides financial
services to almost 50 per cent of users.
Key factors contributing
to the success of mobile
money in Africa are:
Limited access to a traditional bank
account for a large part of the African
population. This excludes them from
a formal financial system,
Mobile phones are widely used
and mobile money facilitates
instant and secure transactions
It is estimated that approximately 70%
of the population in rural areas cannot
access formal financial infrastructure.
Mobile money is thus a viable
alternative to cash and informal
financial management
Initially focused on peer to peer transfers and
mobile phone top-ups, mobile money now
caters to extensive set of financial needs such
as international transfers, bill and merchant
payment bill, salary payments and financial-
aid disbursement. Telecom operators are going
one step further by providing services such
as loans and savings via the mobile handset.
Proximity payments are also making their way
to African market. Near-field communication
(NFC) and QR code-based payments would
further add to the ease of using mobile money.
Major access channels used for mobile
money solutions have been USSD, SMS and
IVR. However, there are certain limitations to
these access channels. For instance, in the
case of USSD, it is cumbersome to go back
and forward across the menu and involves
multiple steps to move from various categories.