The fifth annual Mobile Money Africa 2013 conference and tradeshow opened May 27 at the Hyatt Regency Hotel in Johannesburg, South Africa, with a view toward defining the future of mobile money in Africa. Considered a “must-attend” for mobile money professionals wishing to succeed in Africa, the event brings together leading players from across the mobile money ecosystem, including banks, operators, regulators, retailers, technology and solution providers.
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. Combined with new developments in commercial payments, and a youth market with strong loyalty to mobile channels, the size of the opportunity becomes clear, organizers of Mobil Money Africa say.
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. The Bank of Uganda estimates that already more than 1 billon shillings (US$383,880) is transacted through mobile money each day.
“With the value of electronic funds transfers in Nigeria alone expected to climb to N160 billion (US$1.01 billion) per day by the end of the year, the opportunity for mobile network operators, banks, merchants and financial institutions is enormous,” said Chris Jones CEO of VeriFone Mobile Money, a brand sponsor of Mobile Money Africa 2013.
A joint venture between VeriFone Inc. and Mobilis Networks Ltd., Verifone Mobile Money works with mobile operators, banks and financial services companies for telecommunications-based money transfer and payment services, applications and infrastructure in emerging markets.
In the next few days presenters at Mobile Money Africa 2013 will address such pressing issues as keeping pace with the changing mobile payments industry; business models for mobile payments in competitive markets; successfully monetizing new services and next-generation technology; reducing risk and enhancing security; developing a roadmap for near-field communication (NFC) payment implementations; and ‘game-changer’ services going forward.
The event comes just over two months after AITEC Africa’s sixth Banking & Mobile Banking West Africa 2013 forum in Lagos, Nigeria, West Africa’s leading banking forum. The forum, which took place from March 13 to 14, addressed challenges and opportunities in the continent’s mobile money industry, albeit with emphasis on banks.
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 banking is the future, not a fad. Because most central banks are also tied into the old banking paradigm, they don’t fully understand the dynamics of mobile banking, worry about the risks involved and therefore resist it. No doubt they are also encouraged to do so by the banks who don’t want mobile operators encroaching into their space,” AITEC Africa organizers said in a statement.
Ghana is a notable exception, the statement said. “There, the central bank has taken the risk of allowing mobile operators to provide money transfer services – and it has benefited millions and reduced money transfer costs substantially. Money moves around the economy far more efficiently and quickly and in that sense, a higher level of financial inclusion has been achieved.”
Phil Sorrell, mobile business director at Swiss-based banking software providers Temenos Group AG, cites limitations of point solutions, friction at the point of purchase, and lack of universal acceptance as hindrances. “Commerce needs universal acceptance,” he said in Lagos. “Mobile operators are now becoming banks. The challenge now is acceptance. Will the merchant accept the customer’s mobile payment method irrespective of the provider?”
Challenges aside, Africa remains a hotbed for mobile money usage. In a sign of increasing competition for market share, mobile phone operator Bharti Airtel Ltd.’s Uganda unit and Warid Telecom Uganda LLC this month merged their money transfer services, drawing a line in the sand for market leader MTN Uganda.
