Mobile Money transaction values to exceed US$870 billion in emerging markets by 2026
In a recent study from Juniper Research, it is estimated that the total value of mobile money in emerging markets will exceed $870 billion in 2026. this will be an increase from $555 billion accrudedin 2021, which is 60% of growth.
The various segments of mobile money in emerging markets includes microinsurance, microloans, micro-savings, and mobile money transfer.
According to the report,the growth is being driven by the transition of mobile money vendors, such as M-PESA, to the PaaP (Payments-as-a-Platform) model.
The new PaaP model enables mobile money vendors to offer their users access to third-party services such as eCommerce; creating additional and multiple streams of revenue.
The research which was titled Mobile Money in Emerging Markets: Segment Analysis, Vendor Strategies & Market Forecasts 2021-2026, identified PaaP as the contingent factor to increasing revenue for mobile money vendors, since smartphone users are also on the rise.
The study recommended mobile money vendors to focus on strengthening their ecosystems by choosing credible merchants to partner with in order to correctly leverage the opportunity.
Over the next five years, the study estimates micoloans to sprint with an estimated growth rate of 180%.
This they argued is possible because microloans through the various mobile money service providers deliver bank-like services to consumers hence increasing their revenue.
Research co-author Damla Sat explained: “While microloans are, by their very nature, small-scale, they are growing rapidly insignificance, by enabling users to access credit as financial inclusion rises. By offering these services to users, mobile money services can pre‑empt competition from banks, while increasing their average revenue per user; creating a virtuous circle.”
Africa and the Middle East zones are expected to dominate in mobile money transactions over the next five years. This will account for 56% of global market value by the year 2026.
The research recommends for vendors in Africa to expand the mobile money service by adding values such as microinsurance and micro-savings.
In 2020, the Central Bank reports show that mobile money transactions in Ghana crossed GHS500 billion as compared to GHS78 billion five years before. The third quarter of 2021 reached more than 1.27 billion.
Ghana has the most successful interoperability platform that allows for cross-network transfers and encompasses both online and offline transactions and big and small merchants.
There are three main microloan products on the mobile money platforms – XpressLoan from Ecobank, AhomkaLoan, and QWIKLOAN, all of which lend money to small businesses across the country. The challenges, however, have been a significant slack in repayment of those loans.