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Expect a rapid rise in mobile money transactions – GSMA

The GSMA anticipates a rapid rise in mobile money transactions in Africa as Coronavirus continues to spread.
The GSMA anticipates a rapid rise in mobile money transactions in Africa as Coronavirus continues to spread.

Countries in Africa, including South Africa, Zambia and Zimbabwe, continue to urge consumers to use digital banking services and mobile money platforms to transact, as cash exchange is increasingly seen as a risk amid the spread of Coronavirus (COVID-19). The GSM Association (GSMA) suggests that the health crisis will push up the number of mobile transactions.

According to the organisation’s annual ‘State of the Industry Report on Mobile Money’ 2019 marked a major milestone for the mobile money industry, with over one billion registered accounts and close to US$2-billion in daily transactions.

For the first time, digital transactions represented the majority, 57%, of mobile money interactions.

The GSMA adds that the industry is witnessing increasing user trust and relevance. With 290 live services in 95 countries and 372 million active accounts, mobile money is entering the mainstream and becoming the path to financial inclusion in most low-income countries.

For consumers, this marks a shift away from cash towards digital payments — for school fees, e-commerce, international remittances, savings, credit, pay-as-you-go utilities and more, it says.

John Giusti, Chief Regulatory Officer, GSMA, says “Increased mobile connectivity and innovative services such as mobile money are building stronger and more inclusive communities. Surpassing one billion mobile money accounts represents a major milestone for an industry that did not exist just over a decade ago. The reach of mobile money agents is now 20 times that of bricks-and-mortar banks. Almost 1.7 billion people remain financially excluded, but the collective strength of the industry holds the potential to ensure that everyone can be part of the new digital economy.”

Akinwale Goodluck, Head of Sub-Saharan Africa, GSMA, confirms the expectation that COVID-19 pandemic will trigger a spike in mobile money adoption.

Akinwale Goodluck, Head of Sub-Saharan Africa, GSMA.
Akinwale Goodluck, Head of Sub-Saharan Africa, GSMA.

“The adoption of mobile money has been growing steadily in sub Saharan Africa particularly in new markets like West Africa coupled with increasing depth and sophistication of services in older markets like East Africa. Mobile money adoption and increase in transactions will see a surge following the COVID19 pandemic as governments seek to reduce cash transactions, reduce face to face transactions and employ mobile money for P2G payments and distribution of government cash palliatives to citizens.”

Management behind South African micro transaction platform Ukheshe says South African banks are turning to cashless transactions and that mobile money transfers, online, debit and credit card transactions are being encouraged as opposed to cash, which is a possible source of transmission.

Clayton Hayward, co-founder of Ukheshe, a micro transaction platform, says that a move to a cashless environment is now possible for all South Africans regardless of income levels or banking status: “While the initial intent was to address the 11 million unbanked or underbanked, cashless transactions have gained momentum in light of the unprecedented global health crisis. Cash is a possible contaminant, making a cashless environment a preferred and safer option.”

Hayward says that internet banking, electronic transfers, mobile banking apps and USSD transfers are better alternatives for controlling the spread of the Coronavirus, while also providing extended value to the users.

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