Mobile money’s role on cashless Africa future

Posted on April 3, 2014 09:34 pm

African countries south of the Sahara are moving closer to a cashless society in which people use “mobile-wallets” for a wide range of their daily spending needs, thanks to the availability of of technologies like MTN Money, M-Pesa, offered by telecom operators and private firms as well as banks. Main telecom operators in Africa have been running and developing electronic-wallet-on-mobile-phone services for the last ten years with Kenya’s popular Mobile money transfer service M-Pesa being the market leader in terms of usage and value. As I noted in my review last week, Safaricom and other mobile network operators in Africa have in that time learned a great deal about development and market readiness, and have been educating users to be familiar with Mobile-wallets on their devices. Currently, the majority of mobile-phone users in Kenya, Africa’s biggest non mineral economy are using mobile wallets on their everyday needs, such as bill payment, buying goods and services, and soon they will be paying for transportation in public transport service providers like Matatu in Kenya, Taxi in Uganda and Daladala in Tanzania. Africa is moving towards a cashless society, with more and more people using mobile money to pay for everyday goods and services.

Market growth for bill payments and online payments via mobile money is expected to rise by 27 per cent this year and 72 per cent by 2016. Advanced mobile payments allow users to put cash into their accounts via ATMs. Factors that continues to encourage much more use of mobile money are like the increase of tablets, smart phones, which has lifted mobile shopping to huge growth, and the readiness of customers through the encouragement and support of telecom operators and bankers. Mobile wallets are aimed at people’s everyday spending of relatively small amounts each time, their main rival was cash. Mobile wallets presently amount to more than 30 per cent of overall cash spending, but this is expected to rise to around 70 per cent in the next four years. In sub Saharan Africa, businesses are focusing on mobile payments with the aim of continuing to facilitate both small and medium-sized enterprises and the general public when shopping or paying bills. Smartphones and tablets usage are increasing, encouraging customers to do mobile payments shopping instead of traditional shopping where payments are made in cash. As Africa moves ever closer to a cashless society, there is a firm belief that majority of Africans will be users of mobile payments wallet services when it comes to life’s everyday spending needs.  The trend is for more people to use less cash, while using more mobile money for spending and transferring money. Mobile wallet is the trend and is more convenient, more secure and involves a cheaper fee affordable to millions of Africans across the continent.

Contador Harrison