from MARIA MACHARIA in Nairobi, Kenya
NAIROBI – THE total value of mobile money transactions in emerging markets is forecast to exceed US$870 billion in 2026, up from $555 billion in 2021.
This represents growth of almost 60 percent, driven by the dominance of Africa and the Middle East.
A new study from Juniper Research projected the transition of mobile money vendors, such as M-PESA, to the Payments-as-a-Platform (PaaP) model, would drive the growth.
This PaaP model enables mobile money vendors to offer their users access to third-party services such as eCommerce, creating additional revenue streams.
The new research, Mobile Money in Emerging Markets: Segment Analysis, Vendor Strategies & Market Forecasts 2021-2026, found that microloans will be the fastest-growing segment within mobile money, with growth of over 180 percent over the next five years.
The research identified microloans as a key way in which mobile money service providers can increase their revenue by delivering banking-like services.
Research co-author Damla Sat explained.
“While microloans are, by their very nature, small-scale, they are growing rapidly in significance, by enabling users to access credit as financial inclusion rises,” Sat said.
“By offering these services to users, mobile money services can pre-empty competition from banks, while increasing their average revenue per user; creating a virtuous circle.”
The research found that Africa and the Middle East will dominate mobile money transaction values over the next five years, accounting for 56 percent of the global emerging markets value by 2026.
It recommends that vendors in Africa focus on expanding sophisticated mobile money services, such as micro-insurance and micro-savings, in order to best address this rapidly growing opportunity.
– CAJ News