Mobile money adoption and use saw continued growth in 2021, processing a record US$1-trillion annually. The industry enjoyed a substantial increase in the number of registered accounts, up 18% since 2020 reaching 1.35 billion globally. The volume of person-to-person transactions were up to more than 1.5 million every hour.

This is according to the GSMA’s annual ‘State of the Industry Report on Mobile Money’ released this week

The report reveals that one of the most significant drivers of growth was merchant payments, which almost doubled year on year. It also highlights how mobile money continues to act as a core pillar of financial and economic inclusion, particularly for women.

While the research provides a global view of the mobile money milestone of US$1-trillion in processed transactions, it also breaks down the contribution of the different global regions including Africa.

Growth hugely evident in Sub-Saharan Africa in 2021

The organisation stated that globally, mobile money growth was hugely evident in Sub-Saharan Africa in 2021, the mobile money industry had 316 live services, 1.35bn registered accounts, 346 million active accounts, US$53.9-billion in transaction volume and US$1-trillion in transaction value.

“Regionally, Africa contributed the following to the overall 2021 mobile money figures: 173 live services, 621 million registered accounts, 184 million active accounts, $36.7bn in transaction volume and US$701.4-bn in transaction value.”

The GSMA added:

• Eastern Africa contributed 59 live services, 296 million registered accounts, 102 million active accounts, US$24-billion in transaction volume and US$403.4-billion in transaction value.
• Western Africa contributed 69 live services, 237 million registered accounts, 58 million active accounts, US$9.3-billion in transaction volume and US$239.3-billion in transaction value.
• Central Africa contributed 19 live services, 60 million registered accounts, 19 million active accounts, US$2.9-billion in transaction volume and US$50.1-billon in transaction value.
• Southern Africa contributed 14 live services, 13 million registered accounts, 4 million active accounts, US$335-million in transaction volume and US$4.9-billion in transaction value.
• Northern Africa contributed 12 live services, 15 million registered accounts, 1 million active accounts, US$77-million in transaction volume and US$3.7-billion in transaction value.

Providing significant growth in merchant payments

Mobile money diversified its value proposition beyond person-to-person transfers and cash-in/cash-out transactions in 2021. It is now playing an important role in the daily lives of people and businesses, especially in low and middle-income countries (LMICs).

The growth of ecosystem transactions such as merchant payments, international remittances, bill payments and bulk disbursements, together with interoperable transactions, are accounting for a more significant share of the global mobile money transaction mix.

Merchant payments were instrumental in the growth of the mobile money industry in 2021.

The value of merchant payments almost doubled, reaching an average of US$5.5-billion in transactions per month.

Providers are demonstrating that they can attract businesses to their platform with better incentives, such as efficient remote on-boarding processes. For example, since Safaricom’s M-Pesa began allowing companies to register for an account online in Kenya, more than 18% of new merchants are self-on-boarding.

“2021 was the year mobile money started to really diversify to B2B services. Beyond traditional person-to-person transactions, such as transferring money to family or friends, the industry is now central in helping small businesses operate more efficiently, and serve their customers better” said Max Cuvellier, Head of Mobile for Development, GSMA.

According to the GSMA during the last decade, the mobile money industry has transformed from being a money transfer service to financially empowering people.

Research shows that since 2012, the number of mobile money deployments has almost doubled, increasing from 169 in 71 countries, to 316 in 98 countries.

The GSMA stated: “Despite the ongoing pandemic, the industry achieved double-digit growth across all key indicators, signalling sustained momentum and growth in the industry. In 2021, the mobile money industry processed a record US$1-trillion … (and) a substantial increase in the number of registered accounts, up 18% since 2020 reaching 1.35 billion globally.”

Increasing financial inclusion for women

Mobile money has also been a driving force for financial inclusion for the world’s most vulnerable, particularly women. Mobile money is empowering women to take more control over their finances and purchase goods that they urgently need.

Additionally, 44% of providers responding to the GSMA Global Adoption Survey now offer credit, savings or insurance products, creating opportunities for underserved individuals to invest in their livelihoods and futures.

With the gender gap in mobile money account ownership raging from 7% in Kenya to 71% in Pakistan – there remain some barriers to vulnerable people benefitting from mobile money.

The GSMA has found that owning a mobile phone is an obvious pre-requisite to using mobile money, and women across LMIC’s are 7% less likely than men to own a mobile phone. Overall, 143 million fewer women own a mobile than men. Additional barriers to mobile money access include a lack of awareness of mobile money and a deficit in perceived relevance, knowledge and skills.

While some progress has been made, the report makes clear that more must be done to address the mobile money gender gap across LMICs.

Concerted action is required from policymakers, the private sector, donors and other stakeholders to learn from success stories, address the issue and ensure that existing gender inequalities are not further entrenched, especially in light of the COVID-19 pandemic.

Access to humanitarian aid

As highlighted in the report, in 2022, the number of people needing humanitarian assistance is predicted to soar to 274 million. Mobile money is expected to play an increasingly important role in both donations – where it makes delivery systems more efficient and transparent for humanitarian actors and donors – and the receipt of aid.

The UN Refugee Agency sent US$700-million in cash and value assistance (CVA) to 8.5 million recipients in 100 countries in 2020. They have set up digital payment programmes in 47 countries,15 of which use mobile money. In many humanitarian settings, the digitisation of CVA via mobile money has the potential to promote agency and dignity, and foster financial inclusion.