The ongoing GSMA MWC 2019, which this year revolves around intelligent connectivity marking the beginning of a new era of highly contextualised and personalised experiences, is already a success with several notable companies and personalities showcasing their solutions at the event being held in Barcelona. The GSMA today unveiled its eighth annual ‘State of the Industry Report on Mobile Money’, offering a current snapshot of the mobile money landscape and highlighting the impact that greater financial inclusion has on lives, economies and innovation, especially in emerging markets.
The report provides a comprehensive picture of mobile money adoption and usage around the globe. At the end of 2018, there were more than 866 million registered accounts in 90 countries – a 20 per cent increase from 2017. The report also shows that the mobile money industry processed transactions worth US$1.3 Billion per day in 2018, with digital transaction values growing at more than twice the rate of cash transactions, indicating that cash is becoming less central to customers’ lives.
This year’s State of the Industry Report looks at how providers are navigating this dynamic and shifting ecosystem which was shaped by key trends in 2018 including:
- An enhanced customer experience owing to increased smartphone adoption and the expansion of mobile money interoperability;
- Diversification of the payments ecosystem;
- The introduction of increasingly complex regulation; and
- A shift towards a “payments as a platform” business model connecting consumers and businesses with a range of third-party services.
This new platform-based approach aims to strengthen mobile money to meet the evolving needs of customers, from enterprise solutions for micro-, small- and medium-sized enterprises, to e-commerce, credit, savings and insurance. The opportunity to increase and diversify revenue streams and reach new and broader customer bases is compelling, says the report. The report has also shed light on some interesting trends for India in the mobile money or e-wallet space.
India and Mobile Money
Some of the key highlights of the report regarding India are as follows:
- Although 80 per cent of India’s population is now banked, the country has one of the world’s highest inactivity rates, with nearly half of banked customers (48 per cent) yet to perform a withdrawal or transaction.
- It has been 3 years since payments bans have been around and the sector has yet to show its true potential, says the report.
- Actions including a ban on new customer registration, the imposition of certain penalties, slow deposit collection and delayed launches were exacerbated when customer onboarding also became more complex, adds the report
- The report also goes on to mention about the Supreme Court ruling having created uncertainty around the extent to which the private sector may continue to use Aadhaar, India’s digital identification system, to link accounts.
- To live up to their true potential, payments banks could re-bundle a host of innovative third-party services and leverage the services that traditional banks offer while also attracting unbanked customers, allowing India’s payments banks to live up to their true potential.
- The report also highlights the American investment conglomerate Ant Financial acquisitions, as well as Berkshire Hathaway acquiring a four percent stake in Paytm, India’s largest digital payments company. To read more about the report, click here.