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What Are the Best Mobile Money Solutions in Africa?
Africa accounts for approximately 70 percent of the world’s mobile money market value which stands at more than USD 1 trillion. Needless to say, the continent carries the most prominent mobile money market in the world. Given that around 60 percent of the continent’s population does not have formal bank accounts, the popularity of mobile banking comes as no surprise.
The mobile money industry has consistently grown around 39 percent annually since 2015, hitting a value of USD 701.4 billion in 2021. The number of registered mobile money accounts, according to a review by gmsa stood at 621 million in 2021, with over 184 million active subscribers.
In the past few years, the world has undergone rapid digitalisation that has overseen significant development in the financial industry in terms of technology. Mobile Money, first adopted in East Africa, has rapidly spread throughout the continent and continues to thrive.
The popularity of mobile money has been attributed to how easy and convenient it is to use. Anybody with access to a mobile phone can easily open an account and start making transactions.
Mobile money has opened opportunities, contributed highly to the economic growth of the continent and played a great role in financial inclusion.
People from all walks of life can now send money with the tap of a button and at very low costs. This plays a significant role, especially in Africa, where most countries are developing, and most of the population is unbanked.
Mobile Money is easy to use and relatively secure compared to fiat money transactions. Making withdrawals and deposits is also very easy as most mobile money providers have made their services available even in the most remote parts of the user countries.
Another critical factor that has led to mobile money’s success is that it cuts across all economic classes. In the case of poor people, there are cheaper options of smartphones and simple, well-designed and sophisticated applications for the illiterate population.
When mobile money was introduced in Africa in 2007, it was controlled by one provider. In the following years, there was little to no competition, which has significantly changed.
Many mobile money providers have emerged since then, which is good for consumers as it gives them options and reduces monopolies, hence keeping costs low. We will look at a few of the top most reliable, convenient and popular money mobile providers on the continent.
Top 4 Mobile Money Providers in Africa
1. M-Pesa
M-Pesa was first launched in 2007 in Kenya by Vodafone and Safaricom. It is the leading mobile money provider in 10 African countries, with over 26 million registered users only in Kenya, 73 percent active. It is one of the most convenient mobile money providers, with over 600,000 agents.
How Can You Open an M-Pesa Account?
Opening an M-Pesa account is quite easy. You only need to register with certified agents who are normally distributed everywhere. You can send and receive money through the phone in a few hours and make deposits and withdrawals at any M-Pesa agent.
M-Pesa for peer-to-peer, C2B & B2B Transactions
M-Pesa’s success is attributed to its adaptability to market needs. It has several services to suit the customers’ needs, whether peer-to-peer, C2B, or B2B.
M-Shwari
In Kenya, Safaricom has collaborated with the Commercial Bank of Kenya (CBK) to bring M-shwari, a service that allows customers to make savings and even request loans.
Other services include M-Pesa App that allows you to pay bills automatically, send money through other providers like PayPal and Western Union, and even Fuliza, which enables you to complete your transactions when you have insufficient funds on your phone.
2. MTN Money
MTN Money is a mobile money service provided by MTN Group, a multinational telecommunications company based in Johannesburg, South Africa. The service was launched in Nigeria in 2012 and has since expanded to other African countries.
It has over 41 million registered customers, with approximately 38 percent of them active. The mobile money platform allows customers to make payments through text or call messages using a SIM card.
MTN’s mobile wallet was created as an alternative for customers who do not have access to traditional bank accounts due to lack of financial literacy or poor infrastructure within the country they live in (e.g., Ethiopia). The goal of this platform was originally to empower unbanked individuals across Africa by providing them with access to financial services that were previously unavailable either because it was too expensive or too complicated for them.
3. Airtel Money
Airtel Money is a mobile money service headed by Airtel Africa, a leading telecommunications company that provides various services in 14 countries in Africa, 5 out of which have the Airtel mobile money service.
The service has approximately 26 million users on the continent. In the African market alone, Airtel Money generated a revenue of USD 553 million.
The platform has seen an increase in total transaction value of 37 percent from the previous year, 2021. This can be attributed to the platform’s low charges on transactions. Aside from deposits and withdrawals, the platform also offers loans and savings, international money transfers and virtual credit cards.
4. Orange Money
Orange Money is a mobile money service operated by Orange, available in 20 African countries. The service was launched in Kenya in 2010 and has since expanded to 19 other countries. It has 8 million users out of 16 million registered customers across its platforms, with an average daily transaction volume of over USD 5 million.
Advantages of Mobile Money
Time Efficient
With mobile money, you pay bills from your phone without physically showing up. You also do not need to make long queues at the bank just to make payments. Most mobile money providers also allow you to add recipients so that you only need to autofill the next time you make payments.
Availability and Convenience
Mobile Money providers like M-Pesa are everywhere in the countries they offer their services. You can send and receive payments in the city or remote areas. Mobile money agents are also everywhere to allow easy depositing and withdrawals.
Low Transaction Costs
Compared to banks, mobile money is way cheaper. This makes it affordable for even the poorer people on the continent.
Easy and Reliable
One key advantage of mobile money is its simplicity and ease of use. Even people without formal education can quickly make payments through the service. The service is also very fast and does not involve lengthy processes, making the service efficient, especially in times of emergency.
Managing Funds
Every time you make a deposit, withdrawal, send or receive money, you get a notification. Mobile money records all your transactions, thus making it easy to monitor usage.
Disadvantages of Mobile Money
Lack of Interoperability
Since most networks are incompatible with this service, this restricts reach and make it hard to perform transactions across different networks.
Security
Your information could easily be leaked. If your sensitive information falls into the wrong hands, you could easily be scammed or defrauded. Unlike banks, mobile money is not very strict with verifications since it aims at making the process as seamless as possible. This means users are more susceptible to scammers and hackers.
Mobile Money FAQs
What is Mobile Money?
Mobile money is a regulated type of payment method that is done via a mobile phone.
How Many Countries in Africa Have Mobile Money Presence?
Around 41 countries in Africa have access to mobile money. They are:
Countries With M-Pesa
- Kenya
- Tanzania
- DRC
- Ghana
- Lesotho
- Egypt
- Mozambique
- Germany
- China
- UAE
Countries with MTN Money (MoMo)
- Uganda
- Rwanda
- Ghana
- Ivory Coast
- Liberia
- Zambia
- Republic of Guinea
- Benin
- South Africa
- Cameroon
- Congo Brazzaville
- Gabon
- Tchad
- Nigeria
Countries With Airtel Money
- Kenya
- Tanzania
- Malawi
- Zambia
- South Africa
- Rwanda
- Saudi Arabia
- Qatar
- Oman
- USA
- UK
Countries With Mama Pesa
- South Africa
- Mozambique
- Nigeria
- Zimbabwe
- Zambia
Countries With Tigo Pesa
- Tanzania
Countries With Orange Money
- Kenya
- Mali
- Mauritius
- Morocco
- Senegal
- Niger
- Uganda
- Madagascar
- Cote d’Ivoire
- Guinea
- Botswana
- Cameroon
- Jordan
How Does Mobile Money Differ from Airtime Top Up?
Mobile money is a way of storing money and paying bills similar to a bank account but through the phone, while airtime top-up is used for making calls and sending messages.
What is the Difference Between Mobile Banking and Mobile Money?
Mobile banking is simply an extension of your bank account and allows you to view and manage your bank account from your phone. Mobile money, on the other hand, is more accessible, does not involve a bank, and uses your phone number instead.
Final Thought
The market is growing, and many new players are entering the mobile money space. With the new features, technology and increasing number of users, the mobile money industry seems promising. Looking at the impact it has had so far on the economy and the market structure, it is clear that it has the potential to change the financial industry structure in the coming years.
As a consumer, it’s essential to understand what type of mobile money solution best suits your needs. So, before you sign up for an account or start using mobile money, research how they operate and how their services compare with others.
Sources:
https://www.finextra.com/blogposting/18843/top-5-mobile-money-technology-providers-in-africa
https://www.vodafone.com/about-vodafone/what-we-do/consumer-products-and-services/m-pesa
https://theafricaiknow.org/posts/the_african_mobile_money_revolution.html
https://www.rfwireless-world.com/Terminology/Advantages-and-Disadvantages-of-Mobile-Money.html
https://www.vodafone.com/about-vodafone/what-we-do/consumer-products-and-services/m-pesa
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