Mobile Money: the underside of a timid transformation in North Africa

Although still very timid in North Africa, mobile money is making good progress with a growth rate of 68% of active accounts in 2021. However, if transactions were estimated at 3.7 billion dollars on the same year, the volume of shipments fell slightly.

Mobile money has transformed the lives of millions of people around the world. There are now 1.35 billion registered accounts that process $1 trillion in transactions annually.

That’s nearly $2 million per minute of transactions, 24/7, 365 days a year, according to the latest report from the GSMA, a global organization that brings together the mobile ecosystem to discover, develop and develop. to deliver fundamental innovations that foster positive business conditions and societal change.

Based on data collected from the GSMA’s 2021 Global Mobile Money Adoption Survey, the body estimates that over the past decade, mobile money has from a niche offering in a limited number of markets to a widespread financial service.

Thus, thanks to mobile money, millions of households in low- and middle-income countries (LMICs) have moved from an informal cash-only economy to a more inclusive digital economy. While Sub-Saharan Africa accounts for 84% of all 30-day active accounts, a new map is emerging in the Middle East & North Africa region.

The growth rate of active accounts (over 30 days) in 2021 in this part of the world jumped 68% against 12% in sub-Saharan Africa and 3% in South Asia. In the North Africa proportion alone, in 2021, a dozen services are in operation while the number of open accounts has been estimated at 15 million, of which 1 million are active (for at least 30 days).

A total of 77 million transactions were carried out in Tunisia, Libya, Morocco, Egypt and Algeria, for an amount of 3.7 billion dollars. While transactions are down 5%, account openings and number of transactions are up, respectively, by 13% and 11%, respectively.

Overall, the mobile money industry has processed over $1 trillion in transactions. The year-over-year increase in amounts traded was spurred by the arrival of new customers and the development of new use cases, according to the document.

In 2012, for example, ecosystem operations, such as bill payments, group payments, merchant payments or international funds transfers accounted for less than 10% of all operations.

Ten years later, this figure has risen to 20%, a clear sign that mobile money providers are willing to diversify their business.

Regarding account openings, in 2021, they reached 1.35 billion worldwide, which represents an increase of 18% compared to the previous year and a figure ten times higher than that of 2012 (134 million).

Among these accounts, 518 million were active on a 90-day basis and 346 million on a 30-day basis, figures respectively 15 times and 13 times higher than those of 2012, while the volumes and frequency of transactions are also in huge increase.

In 2021, the average number of P2P (person-to-person) transactions carried out in the space of an hour is more than 1.5 million compared to less than 68,000 in 2012, while accounts register an average of 3.5 P2P transactions per month.

However, if the sector shows insolent growth, it faces many regulatory obstacles which persist despite the considerable success encountered by mobile money services in many countries.

The specialists and the author of the report point out that their sustainability could be called into question by political or regulatory interventions, whether it be the taxation of certain transactions, the imposed implementation of instant payment solutions or costly data localization obligations.

According to them, the high costs of compliance are borne by both mobile money providers and customers, with potentially negative repercussions on future investments in these services and their use by customers.

Dialogue between policy makers, regulators and industry leaders is critical to prevent policies and regulations from having adverse effects on the development of mobile money, it is recommended.

Khadim Mbaye / ECO Inspirations

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