Mobile Cash transactions per day on a global scale exceeded US$2 billion and is expected to surpass US$3 billion a day by the end of 2022 GSMA.
The State of the Industry Report on Mobile Money 2021 is done by GSMA, an organization representing mobile operators’ interests worldwide.
With 5.2 billion mobile users worldwide, mobile technology has kept people connected, delivering vital financial support and providing safe, no-contact ways to pay for food, electricity and other life essentials.
“With more than $2 billion being transacted every day, Mobile Cash has become a part of a new daily routine for millions around the world during the COVID-19 pandemic,” said Mats Granryd- Director General, GSMA.
Mobile Cash Accounts
With over 1.2 billion registered mobile cash accounts and 300 million monthly active accounts, mobile money providers have become an integral part of the national COVID-19 response in many markets, offering a secure and ready channel to disburse pandemic relief payments.
This year’s State of the Industry report explores how the mobile cash industry has embraced disruption and built resilience over the past year.
The 2021 State of the Industry Report on Mobile cash is prepared in collaboration with the mobile money industry and produced with the Bill & Melinda Gates Foundation’sFoundation’s support.
In its executive summary, this report notes that in a year of global upheaval, mobile money provided a financial lifeline for 2020.
In every region of the world, COVID-19 triggered a mix of responses, from school and workplace closures to restrictions on movement to complete lockdown.
All at once, handling cash, paying for daily essentials and conducting business in person became risky, and more people than ever turned to mobile money as a safer option.
With consumer spending down and transaction fees waived, providers found it difficult to reap the commercial benefits of higher mobile money usage and a widespread shift from cash to digital.
However, the industry proved resilient as providers did their utmost to keep economies going and provide an essential service to people in need.
Registered mobile accounts
In 2020, the number of registered accounts grew by 12.7 per cent globally to 1.21 billion accounts – double the forecasted growth rate.
Apart from changes in consumer behaviour, this impressive uptake was due to regulators implementing more flexible Know Your Customer (KYC) processes and relaxing onboarding requirements to make it easier to open an account.
The fastest growth was in regions where governments provided significant pandemic relief to citizens.
There are now over 300 million monthly active mobile money accounts. Not only are customers using their accounts more frequently, but they are using them for new and more advanced use cases.
This suggests that more and more people are moving away from financial systems’ margins and leading increasingly digital lives.
To minimize the pandemic’s human and financial toll and keep economies afloat, national governments distributed unprecedented monetary and fiscal support to individuals and businesses.
The value of government-to-person (G2P) payments quadrupled during the pandemic as the mobile money industry worked for hand in hand with governments and non-governmental organizations (NGOs) to quickly distribute social and humanitarian payments securely and efficiently to those in need.
As remote operations become more critical, collaboration with lenders and insurance providers are also expected to increase.
Agent mobile cash platforms
Agent networks have always been a core part of the mobile money industry, but during the pandemic, they proved critical. As demand rose for non-physical payments, some regulators declared mobile money agents an essential service.
Through the pandemic, mobile money providers invested in keeping agent networks open and safe by providing handwashing stations and personal protective equipment (PPE) to agent outlets.
International remittances processed via mobile money increased by 65 per cent in 2020. For the first time, over $1 billion is being sent and received every month.
Despite fears that remittances would decline as people worldwide suffered job losses and income cuts, it seems clear that diasporas around the world continued to use mobile money to come to the aid of those back home.
The value of mobile money merchant payments grew by 43 per cent compared to 28 per cent in the previous year.
On average, US$2.3 billion in merchant payments were transacted per month in 2020, and QR codes became the second-most offered channel for merchant payments after USSD.
Over the past five years, the value of transactions between mobile money platforms and banks grew fourfold, reaching US$68 billion in 2020, up from just US$15 billion in 2015.
During this period, the money flowing between the two systems has remained in close balance, highlighting the complementary relationship between banks and mobile money services. In many markets, transaction limits were increased to allow more funds to flow through mobile money, directly reducing the need for day-to-day cash transactions.