José Soares, head of marketing at PBel, at the Digital Services Africa conference. Image by HumanIPO.
Mobile money has become a swiftly growing success in Sub-Saharan Africa, surpassing even international payment figures.
José Soares, head of marketing at PBel, discussed the revolution of the mobile money experience in Africa at the Digital Services Africa conference in Johannesburg, South Africa, this week.
Referring to the geographical spread of mobile money success on the continent, he pointed to East African figures as evident of its location, rather than continent-based profitability.
“Everyone says that mobile money is booming in Africa, but the reality is [when] looking at the map …you’ll see it is booming in Africa, but it’s a sub-Saharan victory,” Soares said.
He called M-Pesa a “shining success” as the ultimate example of mobile money accomplishment.
Tanzania, Kenya and Uganda are the three African countries with maximum mobile money popularity.
According to Global System for Mobile Communications Association (GSMA) statistics of 2012, there are 48.5 million mobile money users in East Africa, versus 4.4 million registered bank accounts and 1.8 million active accounts.
Growth figures show 150 mobile money services are available to unbanked countries in Africa of which 41 were launched in 2012 alone.
East Africa offers 26 providers of mobile money, a significant difference compared to the 14 in West Africa and six in Middle Africa.
“Mobile money is a challenging industry and there has been growth in a number of industries in every region,” he said.
Recorded transactions between 2011 and 2012 hit 182 million as processed on 78 platforms, which totalled in US$3.8 billion revenue by February 2012.
The amount soared to 224.2 million transactions, adding up to the value of US$4.6 billion.
Compared to international payment platform PayPal which reached US$196.3 million in transaction amounts by the third quarter of 2012, African mobile money has clearly exceeded accomplishment.
Making reference to an article in The Economist, it is easier to secure a taxi through mobile money payment in Kenya than in New York City.
Mobile money achievement in Africa is a complex matter because the same solution does not work for all the countries.
“The industry is so young and there is no formula you can cut and paste and use somewhere else,” he said.
However, relaunches of failed strategies are part of the growing successes.
Mentioning Nigeria as an example, Soares questioned the lack of mobile money popularity in a population of 162 million with both a large network and great cell phone penetration.
Making progress in the Zimbabwean market at present, EcoCash is one of the chief drivers of mobile money with 6.2 million base subscribers.
South Africa’s adoption of mobile money is however a more difficult challenge because of an ATM and card-driven society with well defined banks.
The key element for the market to catch on with mobile money is trust, Soares explained.
“Mobile money is a very young service and when it comes to the base, people have a lack of trust in the service and they are really unfamiliar with the service,” he said.
The virtualisation of the mobile wallet is an important concept to realise, with a continued drive to not only spend money as per transaction
Soares sees the synergy of mobile networks and banks as a possible solution.
However, Brian Richardson, managing director at Wizzit, believes such a partnership will prove to be fatal.
