Kenya has the highest share of adults with a mobile money account, at 58 percent, followed by somalia, tanzania, and uganda with about 35. The use of mobile money has grown exponentially over the past 10 years, making the region the global leader in mobile money innovation, adoption, and. Africa is the global leader in mobile money, which has become an important component of africas financial services landscape. Mpesa m for mobile, pesa is swahili for money is a mobile phonebased money transfer service, payments and microfinancing service, launched in 2007 by vodafone group plc and safaricom, the largest mobile network operator in kenya. It highlights differences among the 4 countries and their financial regulatory environment. Mpesa and the rise of the global mobile money market. We forecast the next 510 years will see effectively exponential growth before ubiquity flattens the growth curve.
Mpesa agents across kenya, where kenyans can exchange cash for virtual currency and vice versa. It further examines different regulations that have influenced the development of financial inclusion through the use of the mobile financial services in the 4 countries. Mobile payment, mpesa, micro business, technology acceptance. The central bank of kenya cbk, and in particular its payments system. In fact, if we look back at the history of mobile payments were actually playing catch up.
The pace of transformation in the micro business sector has speeded up with more micro businesses realizing the potential of using the mobile payments in their service delivery. To compete in africas diverse mobile money markets, banks must offer distinctive mobile and digital services not only in payments and deposits, but across the spectrum of financial services. The previous reports in this series, in 2009 and 2011, focused mainly on emerging technologies and the various types. Pdf role of mobile money transactions on revenue of. The impact of mobile payments on the success and growth of microbusiness. The success of mpesa in countries such as kenya has favored significant growth for mobile payment market in africa.
Enabling mobile money policies in kenya fostering a. The mobile industry is a key driver of economic growth and employment across africa. Sep 25, 2015 one of the most prominent mobile money services in the region, mpesa, was developed in kenya. The impact of electronic payments on economic growth introduction greater worldwide card use raises a number of questions. M payments are financial transactions undertaken using mobile devices such as mobile phones and pdas. The case of mpesa in kenya marion mbogo abstract microbusiness enterprises in the developing world are increasingly deploying the use of mobile payments to enhance the quality of their services and increase growth.
Even a companion visa or mastercard debit card is provided to mobile money account holders to enable cash withdrawals at atms, card payments to merchants, and to equip customers for online shopping. One notable example of mobile money technology developed in kenya is mpesa m. Uganda has seen explosive growth in mobile money adoption growing to 7 million registered accounts in just four years. Mobile money services typically offer a subset of the following services peer to peer money transfers p2p, remittances domestic and or international, bill payment receipt, salary disbursement receipt, retail payments, and money storage savings. The impact of mobile payments on the success and growth of micro.
The world bank therefore does not warrant that the use of any thirdpartyowned individual component or part contained in the work will not infringe on the rights of those third parties. Mobile is already the largest banking channel for the majority of banks by volume of transactions. Benin, botswana, burkina faso, cote divoire, gabon, ghana, kenya, lesotho, rwanda, swaziland, tanzania. Oversight issues in mobile payments prepared by tanai khiaonarong1 authorized for distribution by ghiath shabsigh july 2014 abstract this paper examines oversight issues that underlie the potential growth and risks in mobile payments. Time to shift gears accelerating growth and poverty reduction in the new kenya. Mobile payments go viral mpesa in kenya world bank. It has seen exceptional growth since its introduction by mobile phone operator safaricom in kenya in march 2007. Mobile payment services are beneficial for regions that possess limited financial services. Mauritius reported a 12 percent increase in tax returns in the first year of taking mobile payments. A more recent report by capgemini forecasts an annual growth of 60. It is at the hub of the customer relationship and is quickly becoming a point of differentiation and is already a source of revenue for progressive banks. Taxation on mobile phonebased transactions and on airtime has been introduced in kenya and is spreading to other african countries. Mobile is the payment technology that will have the greatest growth over the next five years.
Mobile payment revenue worldwide 20152019 statista. In 2014 the broader mobile ecosystem contributed 5. Enabling mobile money policies in kenya fostering a digital. The growth of mobile money in africa the borgen project. The effects of usage associated with mobile phone banking in kenya are yet to. The worldwide mobile payment revenue in 2015 was 450 billion u. Moodys analytics attempted to answer this question by analyzing macroeconomic data for 70 countriesregions between 2011 and 2015. International experience suggests that financial authorities can develop.
The growth of global mobile banking users is in an exceptionally rapid phase. Mobile money a payment industry revolution impacting. Mobile payment market size, share and growth forecast 2023. Growth and innovation in african retail banking globally, the banking industry is facing disappointing returns and sluggish growth. India has the second largest mobile user base in the world with a. Rapid development of information technology has made banking tasks more efficient and cheaper. The rapid growth of mobile payments technologies in the last few years.
The battle between cash and mobile payments in africa. Mobile money transfer mmt has marked a new frontier in mobile phone technology with an ever increasing number of micro businesses using it in their transactions to enhance performance. Microbusiness enterprises in the developing world are increasingly deploying the use of mobile payments to enhance the quality of their services and increase growth. The number of uses to which mobile money transfer mmt can be. Mobile money services design and development for financial. Regulatory questions that kenya needs to ask for better growth in mobile financial. Since 2007, safaricom and vodafones mpesa application has allowed users in kenya and beyond to store funds on their mobile devices in order to transfer funds to other users, pay bills, and make other purchases. The impact of mobile payments on the success and growth of.
Mobile money transactions are now larger than kenyas. Fiftyfive per cent of surveyed mobile money providers have now partnered with humanitarian organisations, an initiative closely supported by our mobile. People use the service to send money from their mobile phone to other account holders, as well as to. Mobile technology developments dovetailed these trends in africa. This study sought to determine the impact of mobile and internetbanking on performance of financial institutions in kenya where the survey was conducted on financial institutions in nairobi. Mobile money the next wave of growth 3 mobile money the next wave of growth is the latest in a series of ey reports on developments and opportunities in the market for mobile payments and related services.
The study revealed that mobile money payments have a significant relationship with financial deepening in kenya. Demonetization and the cashless push have propelled the growth to stratospheric levels. Unlike ghana and kenya, the government in africas second largest economy hasnt issued directives toward mobile payments, but the situation with covid19 is pushing fintech startups to act. In this context, we are delighted to share the 2017 state of the industry report on mobile money. The mobile payment market is anticipated to grow at a cagr of 33. Role of mobile money transactions on revenue of microbusiness in kenya. Regulatory impact on mobile money and financial inclusion in. Foremost, do electronic payments bring macroeconomic benefits. To improve productivity, many firms in kenya have implemented m payments. Nov 27, 2018 the tieup of kenyas mpesa with paypal and western union, coupled with two of the largest cellular operators mtn and orange working on a mobile wallet that operates across networks, have. Kenya mobile money market assessment nethope solutions center.
The agent distribution network, which has been vital to the growth of the mobile money industry over the last decade, shows no sign of diminishing. Effect of mobile money payments on financial deepening in. In fact, india is expected to be the growth engine by 2025. It has seen exceptional growth since its introduction by mobile phone operator. Mobile banking also known as mbanking, mbanking, sms banking is a term used for performing account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or personal digital. In conclusion, mobile payments are a strategic opportunity for banks, both as a defensive play against new entrants, as well as a growth prospect to convert cash into electronic transactions.
Enabling mobile money policies in kenya foreword the innovative use of mobile phone technology to drive financial inclusion in kenya has been widely acclaimed around the world. Pdf mobile payments mpayments are increasingly being adopted by organisations as a new way of doing business in the 21 st century. Africa turns to mobile payments as a tool to curb covid19. Effect of mobile money payments on financial deepening in kenya. Mobile banking has moved quickly beyond being simply online banking using a smart phone. Image caption in kenya, 21 million people are using safaricoms mpesa mobile payments app.
Mobile technology is becoming an important part of customers daily lifestyle, owing to the ease in making diverse transactions. Transactions 2025 an economic times report on the future of. Pdf the role of mobile banking in enhancing economic. But these figures mask wide variation within the subregion. Once you have signed up, you pay money into the system by handing cash to one of safaricoms 40,000 agents typically in a corner shop selling. In the current scenario, services and goods providers extensively offer their services through mobile apps to assist customers by providing an easy and convenient shopping experience.
This case study is a useful addition to the body of literature on what has driven this success story. The growth of mpesa is a testament to safaricoms vision and execution capacity. Three other mobile operators have also begun to offer mobile money services in kenya. Regression analysis was used to establish the effect of mobile money payments on financial deepening in kenya. Rwanda, kenya, tanzania and uganda also accept mobile tax payments. The report is prepared by the gsmas mobile money programme in. Since 2007, kenyas mpesa has revolutionized the way people spend, save, and send money. The battle between cash and mobile payments in africa bbc news. Of these, p2p tends to be the most common offering. Thirdparty contentthe world bank does not necessarily own each component of the content contained within the work. Download the paper to see the contributing viewpoints from highlevel policymakers and. May 16, 2018 then, using simple arithmetic growth rates kenyas gdp is growing at 5% per year, however, its mobile money transaction value is growing at 5% per quarter we predicted both kenyas gdp and the mobile money transaction value for each provider over the next two quarters.
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