Mobile money services have shaken up banking globally and are set to be a key driver in how telemedia services evolve and expand in the years ahead.
The ubiquity of the mobile phone can be blamed for many things, but it has to be said that it has done wonders financial inclusion globally and, with that, it has ushered in the digital economy not just in the leafy suburbs of European or Asian cities, but right out to the most isolated populations globally. In many ways mobile money could be seen as the greatest triumph of mobile so far.
And it is set to grow still further, if recent research is to be believed. According to data from Juniper Research, more than half (53%) of the adult population in emerging markets will use mobile money services by 2030; expected to gain more than 370 million additional users from 2026.
This is all good news for telemedia, as it brings many millions more into the mobile world and gets them spending on content and services. But what is more interesting is that the increasingly wide uptake of mobile money services is making interactions with government agencies, insurance and utility companies and other non-entertainment facets of everyday life even easier.
Only last month we saw that Dubai-based mobile connectivity provider tpay is to offer direct carrier billing (DCB) for government payments in Egypt, following the signing of licence with the country’s regulator the National Telecom Regulatory Authority (NTRA). And Egypt is a country where 76% of the population do have a bank account. Mobile money is an easy way to pay and sees many – banked and unbanked – consumers bypass traditional ways to pay for the ease of mobile money services.
And this is interesting as, while not directly impacting many content-led telemedia players, the very fact that it makes an ever-increasing number of consumers interact financially with the world through non-banking services only acts to make using mobile – and mobile payments – more attractive for all the fun stuff.
But there are caveats.
Challenges
There are two big issues with mobile money in developing markets: a lack of financial literacy (and, to be fair, some degree of technology illiteracy too) and the risk of fraud. These things operate hand-in-hand, but are in effect two separate challenges.
Mobile money can reach anyone with a phone. However, many of these people live in remote and very rural locations and this is there first brush with financial services of any kind. For many it is also among their first encounters with mobile and internet tech (especially in some of the most remote locations only just getting satellite internet). These people are not familiar with what happens with banking and are unfamiliar with the services, the fees or the world that it opens up to them.
While mobile money services rely on a network of agents to help with cash top-ups, there remains a lack of understanding and proper financial advice about the banking services available.
The same applies to fraud and scams. Lack of financial and digital literacy make new users of mobile money even more susceptible to fraud – not least with AI driving fraud scams that seem increasingly genuine – and this is a big problem, especially for those on low income.
There are also technical and logistical issues. Many users have feature phones rather than smartphones, which means that mobile money services have to be designed to fit those too.
The reliance on agents is a logistical issue – there have to be distributed so that the system can function properly, as well as having to be managed, policed and made to be compliant with local and international anti-money laundering rules and KYC authentications.
Together these issues are a significant drag on mobile money progress – and therefore will have an impact on telemedia services in developing regions.
But there are ways around them.
How M-Pesa gets it right
M-Pesa, Kenya’s pioneering mobile money service, is the one to watch. Set up by Safaricom (now majority owned by Vodafone) in 2007, this mobile money service worked closely with Kenya’s central bank and with telecoms and financial services regulators from the get-go – a pragmatic approach that has seen the service flourish.
With bank and regulatory oversight, telecoms and services providers can use the service to offer a range of what are in effect financial services to clients more easily. It also has a well-managed and well-trained roster of agents in the field and has grown to offer interoperability with other banks to make the service an embedded part of the country’s financial set up. It is also now expanding into other markets, most recently Ethiopia.
Open and expanding
Taking these lessons from M-Pesa on board, many providers are starting to ramp up their mobile money offerings and are turning to increasing interoperability – which Juniper says is the key driver to the expansion of these services between now and 2030 – and the use of open platforms.
“Interoperability is crucial for mobile money providers to move beyond domestic, closed-looped networks and integrate into the wider economic system,” explains Jawad Jahan, Research Analyst at Juniper Research. “Vendors who have been successful in partnering with financial and non-financial partners enable ecosystem growth. This expands product breadth and depth and boosts financial inclusion by allowing users to connect to different networks, platforms, and institutions seamlessly from a single point of access.”
To achieve this, many platforms are becoming open. According to GSMA research, around two-thirds of mobile money providers now offer open APIs to third parties to facilitate broader engagement with external developers, fintechs and service providers; supporting higher transaction volumes and extended use cases beyond basic P2P transfers.
One thing is for sure, mobile money – including, but very much not limited to DCB – is growing and evolving globally and, as said, this is what will play a significant role in driving uptake not just of financial services, but broader telemedia services around the world.
