According to the GSMA's 2015 State of the Industry Report on Mobile Financial Services one in three mobile connections in Sub-Saharan Africa are linked to a mobile money account, and mobile money penetration in East Africa exceeds 50%.

Analysts have confirmed the rapid global expansion of mobile money services in 2015 and the role these are playing in facilitating cross-border remittances.

ITWeb Africa spoke to Glen Jordan, Director of financial services provider IMB, to discuss Africa's developing mobile money ecosystem, the market realities, opportunities, risks and his opinion of which direction the industry is heading.

Q - What is the state of Africa's mobile money ecosystem?

Glen Jordan: Africa is progressing rapidly. South Africa is not. Two reasons: One, the legislative environment. We have strict regulations preventing new players entering the space where it most required – and that is at the unbanked.

Two, the strength of the traditional banking environment. Historically, because we have had more traditional banking penetration than a lot of other African countries, mobile money is not entering virgin space.

In the informal South African economy, cash is still king. It is tangible and trusted. The lower-end market does not trust the traditional banking environment.

In a strange twist of irony, the strengths of mobile money actually hinder its adoption. Little surprise when you consider how the lower-end market has been treated up until this point. Having said that, it is growing – and will continue to grow as we push down costs and improve functionality.

Q - Service providers have raised concern over the emergence of a 'super racket' within the continent's remittance space – how realistic is this and what would the impact be on the market if this happens?

Glen Jordan: In this day and age I think a super racket would be difficult to maintain. However, this depends on the legislative environment.

The strict money laundering and exchange control legislation makes it ridiculously complex for the average migrant to send money home.

In that sense, the traditional players are not competing on technology and service, but on compliance. Their competition therefore comes at the lower end of the market in the ''Checkas'' – the taxi driver carrying physical cash.

It is no coincidence that the South Africa–Zimbabwe remittance corridor is one of the most expensive in the world.

We need a more relaxed legislative environment – particularly at the lower end of the market – and more competition to ensure that no super racket can be maintained, and to stop taking cash out of a poor migrant worker's pocket to send to shareholders in New York.

Q- The issue of regulation is often included in news surrounding mobile money and remittance services within Africa. What is your view on this?

Glen Jordan: In a remittance context, the Reserve Bank is between a rock and a hard place. The vast majority of remittance on the continent is from SA to the rest of the world, so they want to ensure that exchange control is maintained while at the same time providing the opportunity to allow smaller amounts to be moved. It is a balance they are still looking to find.

In regards to mobile money, the FSB has also got a tough line to walk between protecting the consumer and hindering new players in the space. The existing regulation that has been developed and implemented is strongly influenced by international first-world policy which, while great in theory, was developed on the assumption that your population is fully banked.

What this means is that a number of informal solutions and proudly South African inventions (like the stokvel) are currently in limbo and occupy a bit of a grey area.

The countries where mobile money is thriving are the countries where the legislators have not been heavy-handed in their approach. Mobile money can be MNO led, bank led or independent and often the leaders in the field are dictated by the legislation.

The countries where mobile money has been most successful is where the legislators have reacted too slowly to have a negative impact.

Q - Is the gap between the banked and unbanked really being reduced? Or is there a lot more that needs to be done?

Glen Jordan: Like most technologies, what can be done in three years is significantly over-estimated but what can be done in ten is under under-estimated. Technology can – and should - be utilised to drive down costs and improve functionality.

In the financial sector, we are removing the complexity of financial services enabling entrepreneurs to enter the financial sector without having to understand its complexity. In the Internet environment we talk about the value of ecosystems.

We are using the intelligence of the technology to enable community entrepreneurs to provide sophisticated services at a fraction of the cost and supporting him to utilise his ecosystem to create a business.

We are not concerned by the speed of the adoption of technology as the results are already being seen and felt by the community even if the individual never uses or understands the technology behind it.

Q - Trust and consumer behaviour must impact your business on some level. Do consumers generally understand services that are available?

Glen Jordan: I think the trust element is key but in terms of understanding how it works, the joy of technology is that the more advanced it gets, the simpler it is to use. An example I like to use is an ATM – people know that if they go to an ATM they can draw money. They don't need to know how the bank has had to hire cash security services to move money into the ATM so you can withdraw it. It's also a great example to illustrate why cash is more expensive than mobile money!

Q - There has been some discussion on the continent about cryptocurrencies, with Kenyan authorities recently advising people against using the service. What is the reality when it comes to people's money and cryptocurrencies like BitCoin, is there sufficient security in place?

Glen Jordan: BitCoin, and even more importantly, the Blockchain, will definitely disrupt and innovate financial services (plus a number of other industries). However, it is still very much in its infancy. With technology (and particularly technology that is creating money) I do not believe that the poor should be the guinea pigs.

It is an extremely new technology and it has a long way to go. I suspect that Bitcoin, and the Blockchain, will be utilised in amazing ways but in ways that have not even yet been considered – not in the ways that we are currently anticipating.

Do I believe that we should take the creation of money away from governments and central banks? Absolutely. Do I believe that Bitcoin is the way to do that? Not yet.

What I do think is that as South Africans and Africans we need to look at ways of leapfrogging development. We have to be innovative and creative in our solutions.

Q - Where do you see the overall mobile money/ remittance ecosystem in five years in Africa?

Glen Jordan: I think that depends on how you measure financial inclusivity. If the measure of success is based on a high number of 'unbanked' to 'banked' conversions, then I hope not.

I'd like to see mobile money operators offering real world value and disrupting century-old industries to provide services that add value to consumers' lives and enable people from all over Africa to transact inexpensively and keep their money safe.

Anybody who uses cash is already part of the financial system. Our challenge is to find ways of driving down the cost of value-added financial services so that everyone can benefit – that is financial inclusivity.

Of course, technology drives down costs so the passing of time will bring more financial inclusivity. Sadly, in South Africa, because of the way that some of the financial institutions have behaved, it was better not to have been financially included. It is our objective to change that.