Mobile money is a huge and expanding market, and one which is experiencing massive global growth. The user-friendly, digital opportunity of mobile money is boosting financial inclusion, and positioning it as the most popular digital financial service in many nations, particularly in areas with less mature access to traditional financial services.
According to mobile industry association GSMA, there are over 1.35bil mobile money accounts transacting more than USD2mil per minute. That marks a significant 18% year-on-year growth in user accounts, and 31% expansion in value of transactions. In this remarkable growth market, here are 7 trends driving mobile money adoption.
Trend 1: COVID-19 Pandemic
The COVID-19 pandemic rapidly transformed our global economic dynamic, as disruptions to business operations, pandemic lockdowns, and enforced health and safety measures such as social distancing changed how we live, work, and travel.
This had a remarkable impact on our global financial system, as customers and businesses lost access to physical services, and turned to digital avenues to undertake their essential financial transactions. The value cashed in and digitized through mobile money agents rose by 18% in 2021, reaching over USD715 million a day. This rise in mobile money transfer came despite the significant disruption to earnings triggered by the pandemic.
Mobile money has also become a valuable path to ensure financial security for the global diaspora, with the number of international remittances sent and received via mobile money growing by 48% in 2021.
Trend 2: Increasing Mobile Adoption
It’s a simple fact that increasing mobile money adoption requires growing adoption of mobile phones. If you want a mobile wallet, you need a mobile to access it. According to analysis by Statista, there were 3.7bil mobile phone subscriptions globally in 2016, rising to over 6.5bil by 2022. That demonstrates the remarkable growth of mobile adoption.
Analysis of global mobile adoption and penetration by We Are Social shows that as of the start of 2022 there were 5.31bil unique mobile phone users around the world, representing 67.1% of the global population. That is a 1.8% rise on 2021, and shows the continued expansion of mobile adoption that is fundamental to mobile money growth.
Trend 3: Improved Interoperability
Mobile money offers a path to improved financial access and fresh products and services, but it cannot live in isolation. Mobile money solutions need to interact with traditional banking services.
The growth in interoperability between mobile money providers and legacy banking institutions is a major driver of wider mobile money growth. According to GSMA, interoperability recorded exceptional growth in 2020 that continued into 2021. The value of transactions between mobile money platforms and banks grew by 46% in 2021, with total value more than doubling since 2019.
Trend 4: Expanding Data Connectivity
Reliable digital financial services require a reliable data service. Mobile data connectivity provides the pathway through which mobile phone users can access digital wallets and mobile money service providers.
In a 2021 report on the state of mobile connectivity, GSMA revealed that 94% of the global population is now covered by some form of mobile broadband network, although just 53% of the population are currently connected—revealing a gap to be bridged to further accelerate adoption. Data speeds are getting faster too, as 4G and 5G networks roll out to larger global populations, with an expected 2bil 5G connections globally by 2025.
Trend 5: Improved Electricity Access
Electricity access is a critical enabler to mobile phone usage. While centralized charging points are used in many countries, the reality is that improved access to electricity in homes and businesses means more ability to operate mobile devices and take advantage of services like mobile money.
Electrification rates have taken huge strides over recent decades, with World Bank data showing that the share of the global population with access to electricity increased from just over 82% in 2011 to 90.5% as of the latest data in 2020. Connecting the 733 million people who still lack access to electricity to reliable supplies remains a priority.
Trend 6: Deepening Commitment to Financial Inclusion
Financial access unlocks economic opportunities that uplift welfare and improve livelihoods. That’s why access to finance is a critical pillar of many of the United Nations’ Sustainable Development Goals.
Analysis by McKinsey estimates that digital finance alone could benefit billions of people by spurring inclusive growth that adds USD3.7 trillion to the GDP of emerging economies within a decade. Initiatives such as the World Bank’s Universal Financial Access 2020 initiative are designed to help address the more than 1.7bil people globally who remain unbanked, and digital tools such as mobile money are key enablers of this. Ongoing initiatives to leverage digital technologies to improve financial inclusion remain a key driver for mobile money growth.
Trend 7: Enhanced Security Solutions
With growth in mobile money solutions, there comes a parallel need to ensure that the mobile money market is safe and secure for both customers and providers. Neural Technologies’ Mobile Money solution is designed to protect mobile money from fraud, leveraging advanced machine learning technologies to deliver robust protection in even this high-volume landscape.
The increasing sophistication and security of these solutions allows users and businesses to implement mobile money solutions with confidence that their data and systems will remain secure, protected from fraud, and maintain regulatory compliance standards critical to a sustainable operation.