Study: Africa’s Mobile Payments Providers Must Diversify to Thrive
Mobile payments tackle two key issues with the current banking system. For advanced regions, the technology is praised for its convenience and around-the-clock service.
However, for emerging countries, managing transactions using a smartphone app is vital to everyday living.
A recent study by Alexey Osipov, Executive VP and MEA Managing Director of Compass Plus, uncovers the influence that handheld payments platforms have on Africa’s economy.
“This is where the African case study comes into fruition. Problems in this region generally arise from a lack of financial inclusion, whether due to geography, politics, economy or culture,” mentioned Osipov.
“Substantial thought, planning and collaboration has been required to extend inclusion by offering appropriate financial services to those traditionally excluded by this sector.”
In areas where banks are scarce and unreliable, many are left to seek out alternative methods for settling monthly bills, transferring money and receiving salaries. Because of this, mobile payments providers in the region have found success in serving the underbanked.
Based on the GSMA Mobile Money for the Unbanked 2013 Global Mobile Money Adoption Survey, the number of mobile money accounts have surpassed traditional bank accounts in the following African countries: Cameroon, the Democratic Republic of Congo, Gabon, Kenya, Madagascar, Tanzania, Uganda, Zambia and Zimbabwe
As the author of the paper points out, competition in Africa is rapidly increasing. In order to thrive, businesses must go beyond providing basic services to solidify their stake in the evolving market.
“Not all countries in the region have shared the same success,” highlighted Osipov.
“For example, here are 18 different mobile money operators in Nigeria, and the sheer oversaturation of market players hoping to profit from what is essentially the same business model, has meant that no one player has been able to emulate the success of the Safaricom MPesa initiative.”