For those with no access to banking services, mobile money provides financial inclusion, a way to participate in the economy without a bank account. This has led to a boom in the use of mobile money in Africa, one of the most underbanked regions in the world. In 2019, 200 million users made 24.46 billion mobile money transactions in Sub-Saharan Africa and the Middle East and Northern Africa, accounting for 64.15 percent of all transactions made worldwide. Of the 690.1 billion U.S. dollars in mobile money transactions made in 2019, 456.3 billion U.S. dollars was exchanged in Sub-Saharan Africa.
Mobile money has become big business for telecommunication providers in Africa. Approximately 144 mobile money providers operate in Sub-Saharan Africa, with two companies such as, M-Pesa, MoMo and Orange Money accounting for a significant share of the market.
M-Pesa, managed by Vodafone and Safaricom and operating in seven countries, has seen significant growth in recent years. The service attracted an additional 12 million users from 2017 to 2020, reaching 41.5 million users by 2020. M-Pesa users made 12.2 billion transactions in 2020, generating 784.36 million U.S. dollars in revenue for parent company Safaricom. MoMo – MTN Group’s mobile money offering – has enjoyed similar growth, reaching 35.1 million active customers in March 2020.
The effect of underbanking on the use of mobile money can be seen in Southern Africa, where banking services are easier to access. Mobile money has gained less of a foothold in that region, suggesting that unless another solution to financial exclusion in parts of Africa is discovered, that the use of mobile money in Africa is set to grow well into the future.