Critical role of operators in using ‘mobile money’ to fight poverty

• GSMA releases initial findings of 2013 mobile money adoption survey
• Strong growth in deployments in increasingly competitive landscape

THE GSM Association (GSMA) has released the initial findings of its 2013 Mobile Money Adoption Survey, which underscores the critical role of mobile and mobile network operators (MNOs) in driving the adoption of convenient and affordable financial services among unbanked and under-banked individuals around the world.
 
According to the survey, there are now 208 live mobile money for the unbanked services in 83 countries, compared with 178 in 74 countries as of January, and an additional 117 deployments are planned over the coming months, the GSMA said in a statement.
 
“The impressive and encouraging results of the study demonstrate that mobile money services are increasingly reaching scale and are becoming even more essential in providing convenient and affordable financial services to the underserved,” said Chris Locke, GSMA Mobile for Development managing director.
 
The ‘unbanked’ are people with no access to financial services. In a separate note, the GSMA noted that in developing countries, 2.5 billion people are unbanked and have to rely on cash or informal financial services which are typically unsafe, inconvenient and expensive.
 
However, over one billion of these people have access to a mobile phone. This provides the basis for mobile money, whereby mobile technology is used to deliver convenient and affordable financial services to the underserved.
 
With mobile money, customers can convert cash to and from electronic value (e-money), and they can use mobile money to perform transfers or make payments.
 
As well as enabling payments, mobile technology can be used to extend the reach of financial services such as insurance, credit and savings.
 
Traditional bricks-and-mortar banking infrastructure struggles to make the business model work to serve low-income customers, particularly in rural areas. However, mobile operators already have large airtime distribution networks which can be used to provide customers with a network of mobile money agents where they can perform cash-in and cash-out transactions, the GSMA noted.
 
Large mobile operators in developing countries typically have 100 to 500 times more airtime reseller outlets than all of the banks’ branches put together.
 
“Through our Mobile Money for the Unbanked programme, the GSMA is committed to facilitating the widespread adoption of mobile money services by identifying and sharing operational best practices, as well as working with operators to create commercially viable, interoperable mobile money services to enable greater financial inclusion,” said Locke.
 
“This survey offers an important snapshot of the mobile money industry today and also gives mobile money service providers a valuable source of benchmark data,” he said, referring to the Mobile Money Adoption Survey.
 
The survey illustrates the increasingly competitive landscape for mobile money services, the GSMA said in its statement.
 
Globally, mobile money services were launched in nine markets in 2013 and the majority of these launches were in markets where mobile money services already existed. There are now at least two or more mobile money services available in 51 markets, compared with 40 markets at the end of 2012 and 33 at the end of 2011.
 
Furthermore, 24 of these markets each have three or more mobile money services, offering even greater choice to consumers.
 
Mobile money is now becoming a mainstream service for MNOs rather than a differentiator; this is especially true in Sub-Saharan Africa, which boasts 53% of all live mobile money services and where services are available in 36 out of 47 countries in the region.
 
The Adoption Survey gives insights into the development of mobile money services globally and shows specifically how mobile money is enabling the financial inclusion of unbanked and under-banked people.
 
The findings show that the adoption of mobile money services by customers is rising and that an increasing number of services are reaching scale. The GSMA has identified three mobile money services that each exceeded one million active users between June 2012 and June 2013 and globally, there are at least nine services that currently have more than one million active users.
 
The full results from the 2013 Mobile Money Adoption Survey will be published at the GSMA Mobile World Congress 2014 in Barcelona.
 
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