State of the Industry Report on Mobile Money 2019 Copyright © 2020 GSM Association 2019 State of the Industry Report on Mobile Money Mobile Money The GSMA represents the interests of mobile operators The GSMA’s Mobile Money programme works to worldwide, uniting more than 750 operators with almost accelerate the development of the mobile money 400 companies in the broader mobile ecosystem, including ecosystem for the underserved. handset and device makers, software companies, equipment providers and internet companies, as well as organisations For more information, please contact us: in adjacent industry sectors. The GSMA also produces the Web: industry-leading MWC events held annually in Barcelona, www.gsma.com/mobilemoney Twitter: Los Angeles and Shanghai, as well as the Mobile 360 Series @GSMAMobileMoney of regional conferences. Email: [email protected] For more information, please visit the GSMA corporate website at www.gsma.com Follow the GSMA on Twitter: @GSMA Lead author: Nika Naghavi Data & Insights Director, GSMA Mobile Money This report was written with the support of the wider Mobile Money and Mobile for Development team. The quantitative assessment of this report was carried out by a team under the supervision of Simon K. Andersson Manjang that comprised of Julian Hoffmann, Kavita Tailor and Tapiwa Jakachira. For more content, visit gsma.com/sotir. THE MOBILE MONEY PROGRAMME IS SUPPORTED BY THE BILL & MELINDA GATES FOUNDATION AND FLOURISH VENTURES. Foreword Foreword 2019 was a momentous year for the mobile harnessing digital finance for sustainable money industry. With over a billion registered development. Mobile money is accelerating accounts and close to $2 billion in daily progress towards the Sustainable transactions, mobile money is evolving like Development Goals and is contributing to the never before. Originally a product for a few economic empowerment of individuals and select markets, mobile money is now a global communities including marginalised groups phenomenon, recording astonishing growth and businesses. For instance, 60 per cent of in emerging markets and reaching a broad surveyed mobile money providers reported range of customers. partnering with a humanitarian organisation to deliver mobile money-enabled cash Thanks to the dramatic rise in internet voucher assistance to over 2.7 million unique and smartphone adoption, increased mobile money accounts. Mobile money is interoperability and new business models, also a key driver of socio-economic growth customers can now choose from a suite of by creating employment, driving business tailored products. For the first time in 2019, productivity and entrepreneurship, helping to digital transactions represented the majority formalise the economy, and providing stability of mobile money flows, and more value is during economic downturns. circulating in the mobile money system than exiting. For customers, this marks a shift 1.7 billion people remain financially excluded, away from cash towards digital payments — but the collective strength of the industry for school fees, e-commerce, international could ensure that everyone can be part of remittances, savings, credit, pay-as-you- the new digital economy. Collaboration go utilities and more. For the industry, it is will be key to taking the mobile money evidence that the ‘payments as a platform’ industry to the next level, while keeping the model — a strategic shift by the industry to needs of the underserved at its core. We encourage more value to remain digital and to are delighted to share the 2019 State of the diversify revenue models— is paying off. Industry Report on Mobile Money, which highlights the transformative ability of mobile As digital products reach the hands of more money to generate broader benefits for the and more low-income users, it is vital to industry and society. The report is prepared ensure that they are user-centric, relevant and by the GSMA’s Mobile Money programme in meet real customer needs. This is why the collaboration with the mobile money industry, GSMA launched the Inclusive Tech Lab in 2019, and produced with the generous support a testing ground for transformative digital of the Bill & Melinda Gates Foundation and solutions. Through the Lab, new products Flourish. will enter the market that unlock access to financial services, provide digital identities for unregistered populations and offer innovative healthcare, education and business solutions. Economies are becoming increasingly Mats Granryd dependent on digital technology, bringing Director General, GSMA to light the central role of mobile money in 1 2019 State of the Industry Report on Mobile Money 2 Contents Contents EXECUTIVE SUMMARY 4 MOBILE MONEY IN 2019 7 REGIONAL GROWTH IN 2019 8 BEYOND ONE BILLION MOBILE MONEY ACCOUNTS A STEP TOWARDS A DIGITAL FUTURE FOR ALL 10 COMMERCIAL SUSTAINABILITY AND THE SHIFT TO A 20 ‘PAYMENTS AS A PLATFORM’ MODEL REGULATORY AND POLICY TRENDS 38 THE FOUNDATION FOR IMPACTFUL SERVICES 44 CONCLUSION 55 APPENDIX 57 3 2019 State of the Industry Report on Mobile Money Executive Summary 4 Executive Summary Executive Summary 2019 marked a major milestone for the mobile money industry: the number of registered mobile money accounts surpassed one billion. Reaching the one billion mark is a tremendous getting paid more quickly and conveniently. achievement for an industry that is just over Meanwhile, millions of migrants and their a decade old. The mobile money industry families are experiencing the life-changing of today has a host of seasoned providers benefits of faster, safer and cheaper with a broad set of operational capabilities, international remittances and humanitarian a full suite of products and a global reach. cash assistance is being delivered more With 290 live services in 95 countries and thoughtfully to those in crisis situations. All 372 million active accounts, mobile money is of this is unlocking new solutions to some entering the mainstream and becoming the of the world’s most intractable development path to financial inclusion in most low-income challenges and highlighting the catalytic role countries. that mobile money is playing in achieving the Sustainable Development Goals (SDGs).1 What is not captured in this figure is the empowerment that comes with owning This year’s State of the Industry Report looks a mobile money account. More women at what one billion registered accounts are using financial services, low-income signify for the mobile money industry, households are accessing essential utility mobile money users and the future of the services and smallholder farmers are mobile money ecosystem. The report looks at some of the biggest trends in 2019: A growing number of providers are markets to become agents. The number of becoming commercially sustainable agent outlets has almost tripled over the past five years, and the reach of a mobile money Not all mobile money deployments are agent is now seven times that of ATMs and profitable, but in 2019 a growing number of 20 times that of bank branches. In rural and mobile money services crossed the threshold hard-to-reach areas, mobile money agents to become commercially sustainable: 60 per have had a transformative impact on financial cent of providers reported a positive EBITDA.2 inclusion. Meanwhile, agents are seeing their Direct revenues from mobile money are monthly incomes rise substantially with supporting investment in innovative products commissions that are not taking away from and services, network expansion, and healthy investment in other areas of the mobile and sustainable agent commissions. With money business. trusted brands, widespread distribution and secure channel access, more and more Providers are shifting to a ‘payments as a providers are delivering services sustainably platform’ model and at scale. In last year’s State of the Industry report, we The industry continues to invest in charted the emergence of a ‘payments as a distribution networks and sustainable platform’ model — a strategic shift by the agent income industry to encourage more value to remain digital and to diversify revenue models The mobile money industry has created by unlocking more targeted services for opportunities for entrepreneurs in emerging individuals, businesses and communities. 1. Lopez, M. (2019). Harnessing the power of mobile money to achieve the Sustainable Development Goals, GSMA. 2. EBITDA: Earnings before interest, tax, depreciation and amortization. 5 2019 State of the Industry Report on Mobile Money 2019 saw a significant drop in reliance on The industry is increasingly interoperable revenue from customer fees alongside rising and integrated revenue from business fees. This is a clear Interoperability with banks and account-to- indication that providers are focusing more on account (A2A) interoperability is meeting the expanding the digital ecosystem and adjacent needs of entirely new customer segments, services like mobile money-enabled credit, including traditionally underserved and cash- insurance and savings. reliant customers. Mobile money-enabled The digitisation of payments has reached international remittances have flourished as new heights the industry has become more integrated with international financial system players. Over the past five years, there has been a Integration via APIs with organisations gradual shift from cash to digital payments, ranging from government agencies to utility but for the first time in 2019, digital companies, online businesses and local transactions accounted