By Amina Faki,
Mobile banking is the future, not a fad. Challenges aside, Africa remains a hotbed for mobile money usage, there is a significant sign of increasing competition for market share.
The mobile money market is already in the process of changing the landscape of financial inclusion in Africa.
The transition from the e-banking and branchless banking concepts, mobile money has proved to be a viable alternative to cash.
Over the years, the mobile money ecosystem has been providing a range of seamless financial services to its customers.
Africa accounts for 15 of the top 20 countries by mobile money usage and, with an estimated 80 percent of adults still unbanked, the potential for growth is enormous.
With the new developments in commercial payments, combined with a large youth market who have strong loyalty to the mobile channels, the size of the opportunity is quite clear.
According to Mobile Money Africa, three mobile money ecosystems – mobile payments, mobile banking and retail money transfer – are evolving across Africa and new partnerships and offerings are needed to capitalize on the growing number of transactions.
This amazing transformation is witnessed in countries like Uganda, Nigeria Ghana, and so many other African countries. For instance, with the value of electronic funds transfers in Nigeria alone was expected to climb to N160 billion (US$1.01 billion) per day by the end of the year 2013, the opportunity for mobile network operators, banks, merchants and financial institutions is enormous
The industry faces numerous challenges in achieving its full potential. Industry leaders say these include central banks moving at different paces and even in different directions, with some taking a lead in promoting services while others appear to be hindering progress; driving adoption among consumers and expanding agent networks (while Africa leads the way in this market, usage figures are at just 16 percent of adults in sub-Saharan Africa); the mobile money ecosystem needs to develop further and banks are increasingly taking lead as they look to ensure mobile operators do not encroach on their space; the balance and form of bank-operator partnerships still needs to be defined so that all parties can benefit fully.
Mobile money transactions support the movement of money around the economy far more efficiently and quickly and in that sense, a higher level of financial inclusion can be achieved.
This system of transacting and executing payments has been able to successfully transform the financial services framework both by complementing and disrupting the traditional way of banking. Owing to its safe, easy and affordable transaction ways, mobile money is touted as a popular alternative to bank accounts. It can be used on both smartphones and basic feature phones.