Mobile money has been a huge success story over recent years, driven by global FinTech industry adoption trends that have seen the value of mobile money transactions reach USD2mil per minute according to the latest survey by industry association GSMA.
With mobile penetration expected to reach 60% of the global population by 2025, with smartphones accounting for 84% of all mobile connections according to GSMA, this year marks a pivotal step on the journey to even greater mobile money adoption. With a growing number of competing FinTech solutions, as well as explorations of non-traditional payment and currency solutions by central banks, the safety, security, and accessibility of mobile money has never been more important.
As we look towards 2023, here are five major talking points to be aware of, which could impact the pace of adoption for mobile money.
Deepening Adoption of AI and ML in Mobile Money
Artificial intelligence (AI) and machine learning (ML) will eventually become the backbone of the FinTech industry, given their ability to handle and process gargantuan amounts of data. Mobile financial service providers will increasingly rely on these technologies to boost their digital security efforts—particularly fraud management systems—by using AI and ML to identify trends and patterns in transactions, analyze big data sets, assess high volumes of real-time data, and warn consumers of potential fraudulent chargers.
Apart from digital security, the FinTech industry can leverage AI and ML algorithms to act as automated customer analysis tools, allowing them to better predict a consumer’s borrowing and lending behavior, and provide flexible solutions for their unique circumstances. As a result, consumers will have access to better financial services. The Global Findex Database 2021 further supports this by stating that the widespread adoption of mobile money has paved the way for better financial opportunities for the underbanked and is slowly closing the gender and financial inclusion gap between the underbanked and traditional financial institutions.
Challenging Economic Conditions Create Shift
A global economic downturn and rising inflation rates are causing a paradigm shift in consumer spending habits, leading to a potential return to cash, as well as increasingly popular buy now pay later (BNPL) solutions. The increased reliance on cash payments is likely to hinder the adoption of mobile money in the short term.
As available cash reserves are depleted, consumers will return to BNPL solutions and credit card payments. Based on a study by Juniper Research, BNPL users will exceed 900 million globally by 2027—driven by the anticipated economic downturn. More customers will opt for BNPL because they are able to make interest-free payments over a period of time, allowing them to maintain a steady cash flow since payments can be done sporadically.
Deepening Need for Mobile Money Security
The fraud industry today is more active and adaptive than ever. In fact, online scams makeup 57% of all financially motivated cybercrime. As more people adopt mobile money payments in 2023, the demand for enhanced security measures will increase tenfold!
Neural Technologies’ Mobile Money solution is designed to protect your customers’ assets and mitigate mobile money risks. Additionally, solutions like Neural Technologies’ SCAMBlock help telecommunication providers ensure that their customers don’t fall victim to fraudulent scam calls, screening high-risk calls and ensuring that fraudsters can’t use traditional deception techniques to cheat customers out of their finances.
More Sophisticated Product and Service Offerings
In 2022, it was reported that there were over three billion digital wallet users, with this number predicted to exceed five billion by 2026. Most digital wallets are equipped with the basic functions of mobile money transfers, prepaid mobile top-ups, bill payments, and in-store payments. However, in 2023, we can expect digital wallet providers to enhance their offerings to include services such as online merchant payments, BNPL, virtual cards, investments, and more.
The addition of these services is expected to further drive the adoption of mobile money, particularly amongst the underserved and underbanked, as these groups lack access to suitable traditional financial services. Similarly, mobile money providers will look into improving their digital wallet security to prevent unauthorized transactions, leveraging solutions like Neural Technologies’ sophisticated Mobile Money solution.
Expanding CBDC Clashes with Mobile Money
Central bank digital currencies (CBDC) are seeing growing adoption across the world, as nations seek to leverage the potential of crypto currency technologies, backed by centralized bank authority. Despite most CBDC efforts still being in the pilot phase, the usage of CBDC is an exciting new form of payment that will shift liability from commercial banks or authorized financial service providers to a nation’s centralized bank.
Over 100 countries are currently exploring the potential of CBDCs according to the Atlantic Council CBDC Tracker, with a number of countries launching their own CBDC between 2020-2022. The Bahamas’ Sand Dollar officially became the first official CBDC when it was launched in 2020, but this trailblazer is certainly not set to the past. This offers a fascinating future of increasing CBDC adoption which will mean a new evolution in the mobile money market.
Get ahead of the competition and protect your mobile money with Neural Technologies’ extensive line of revenue protection solutions. Speak to our experts at Neural Technologies to find out more today!
