By Nse Anthony-Uko
(Sundiata Post) – Migrants are now sending an estimated $581 billion in remittances to their families-three times the volume of official aid flows according to the 2017 State of the Industry Report on Mobile Money which will be launched next week Monday February 26, 2017 at the Mobile World Congress in the Mobile for Development seminar in Barcelona, Spain.
The report made available by GSM Association, chronicles a decade of mobile money across the globe. It said there are now 277 live services across 92 markets, including two-thirds of low- and middle-income countries. Registered accounts grew nearly six-fold in the last five years to more than half a billion in 2016, helped by a growing network of mobile money agents.
In 2016, there were more than 4.3 million registered agent outlets, of which 2.3 million were active on a monthly basis; 30 countries now have 10 times more active agents than bank branches, bringing mobile money within reach of millions of unbanked households.
Mobile money providers are at the forefront of payment services in many emerging market economies. In December 2016 alone, the industry processed 1.3 billion transactions, averaging around 30,000 transactions a minute.
While Sub-Saharan Africa continues to take a leading role in the share of registered and active mobile money accounts, new regions have demonstrated strong uptake of mobile money services in recent years.
In 2016, 40 per cent of all new registered accounts were from South Asia, where providers were able to sustain strong registration growth and activity rates. In the five-year period between 2011 and 2016, active mobile money accounts in South Asia grew nearly thirty-fold. Latin America and the Caribbean has also experienced noteworthy growth in recent years.
Active mobile money accounts grew from less than a million in December 2011 to more than 10 million by the end of 2016. The number of live mobile money services in the region grew from nine to 30 during this period.
The study said in the early days, mobile money providers interested in international remittances facilitated ‘north-South’ flows, where mobile money was the channel for receiving remittances from developed countries. More recently, the industry has been experimenting with mobile money as both a sending and receiving channel for international remittances, allowing providers to target intra-regional corridors.
At the end of 2016, there were 46 live international remittance corridors across 21 countries where mobile money was both the sending and receiving channel.
Most of these corridors are in Sub-Saharan Africa, but initiatives are also live between France and Côte d’Ivoire, Mali, and Senegal through orange, as well as Qatar to the Philippines and Kenya through Ooredoo.
According to GSM, mobile money is also contributing to efforts to achieve UN SDG 10.c. GSMA research revealed that the cost of sending $200 using mobile money is already less than three per cent in 34 country corridors, and it is less than two per cent in 15 country corridors.
Further, on average, the cost of international remittances using mobile money was more than 50 per cent lower, when recipients chose to forego cash-out fees by retaining their remittances in digital form and more than 20 per cent cheaper when incorporating cash-out fees.
When the Global Findex survey was updated in 2014, it showed the number of unbanked people globally had dropped from 2.5 billion to two billion in just five years. Much of the gain in low-income countries has been attributed to the spread of mobile money.
The biggest impact was felt in Sub-Saharan Africa, where 12 per cent of adults in the region had a mobile money account. In 2015, mobile money accounts surpassed bank accounts in the region. By 2016, there were 277 million registered accounts in Sub-Saharan Africa, of which more than 100 million were active.
In this context, mobile money has emerged as one of the primary tools for reaching the underserved. To put the size of the industry into context, the total number of registered mobile money accounts would today be the third largest country in the world, behind China and India.
Globally, there are more than half a billion registered mobile money accounts globally (556 million), of which 174 million are active on a 90-day basis.