November 23, 2016
Mobile money is one of the most exciting innovations in financial services, with more than 400 million registered consumer accounts across over 90 countries, said John Giusti, Chief Regulatory Officer, GSMA. While today mobile money services are largely used for domestic transactions, international transfers represent the fastest-growing segment of mobile money services.
GSMA took up a task to assess the role of mobile money in democratizing international remittances and driving financial inclusion in the developing world. A few weeks ago, the organization published a report called Driving a Price Revolution: Mobile Money in International Remittances, outlining the promise of mobile money for international remittances.
The World Bank’s Migration and Remittances Factbook 2016 suggests that today, close to 250 million people (~3.4% of the world population) live outside their countries of birth. In 2015, global remittances totaled $581.6 billion, of which $431.6 billion, or nearly 75%, was sent to the developing world.
Professionals from GSMA believe that mobile money is revolutionizing the international remittance industry by leveraging broad mobile penetration and the asset-light business models of mobile operators. Mobile money is believed to be driving a price revolution by increasing competition, leveraging existing networks and infrastructure, and capturing smaller remittance values than traditional players.
With mobile money growing more than 400% YoY in 2015 and a democratizing effect of the industry on international remittances, mobile money providers are well-positioned to secure a strong footprint in the developing world and facilitate financial inclusion for large un/underbanked population.
Certain African countries are expected to become the hottest mobile money markets by 2020 – Ghana, Kenya and Tanzania. According to CGAP, 17% of Ghana’s 27.3 million citizens had a mobile money account in 2015, which has doubled from 2014. Ghana demonstrated a rapid growth of mobile money and a potential to become the world’s most successful mobile money market moving previous leaders.
Moreover, 92% of adults in Ghana have the required ID necessary to open an account and 91% of Ghanaians own a mobile phone. As stated by The World Bank, Ghana has an even greater potential for mobile money than Kenya and Tanzania, which are considered two of the most successful markets in the world.