MOBILE MONEY: Boom yet to come in Africa:

Although Africa has taken giant strides in the mobile money ecosystem, only a small fraction of Africans are currently partaking in the mobile payment system. Olubayo Abiodun, Clifford Agugoesi and Chimezie Ndubisi look at the challenges and opportunities for the continent in the mobile financial services.

AFRICA is bustling with renewed vigour in this digital economy age. Several pundits have predicted that the continent would leverage the new opportunities that digital present. This optimism has been founded on the achievements in the digital mobile phone sector in many African countries.

Indeed, at various forums such as at the International Telecommunications Union (ITU), Mobile World, GSMA, AITEC, Africa Telecommunications Union, Commonwealth Telecommunications Organisation (CTO) Africa has been acclaimed as the fastest growing digital mobile market in the world and biggest after Asia.

In the mobile money ecosystem, the three platforms evolving across the continent are mobile payments, mobile banking and retail money transfer. And as these platforms continue to evolve, new partnerships and offerings are needed to capitalise on the growing number of transactions. For instance, the Bank of Uganda revealed that more than one billion Shillings ($383,880) is transacted through mobile money each day.

Similarly, the CEO of VeriFone Mobile Money, Chris Jones, said that “with the value of electronic funds transfers in Nigeria alone expected to climb to N160 billion ($1.01 billion) per day by the end of the year, the opportunity for mobile network operators, banks, merchants and financial institutions is enormous”.

Africa’s leading role in the global mobile money market is reflected in the fact that it accounts for 15 of the top 20 countries by mobile money usage. And with an estimated 80 per cent of adults still unbanked, the potential for growth is enormous in Africa. This has become even more so with the new developments in commercial payments and the huge youth market that predominantly tied to mobile phones.

And as a result of the shift to the digital economy, the trend in the financial services ecosystem in Africa now includes mobile money, mobile banking, cashless economy, cashlite transactions, internet banking, and Point of Sale (PoS) terminals. These have also led to new transaction strategies within the ecosystem. These strategies include Person-to-Person (P2P) electronic transfers, Business-to-Business (B2B), Government-to-Government (G2G), Business-to-Government (B2G), Person-to-Government (P2G) and vice versa amongst others.