A recent analysis shows that Africa’s mobile money potential is immense and expanding rapidly. According to a forecast by Boston Consulting Group (BCG), the total value of global mobile financial services would be between $15-20 trillion per year in 2020.
The paper estimates the potential market for banks in Sub-Saharan Africa at $500 billion,
almost entirely in P2P payments. Mobile payments give access to new goods and services across sectors such as iGaming, e-commerce, healthcare, education, energy, and transportation. However, as African economies expand, mobile devices have become the preferred payment method for many. Mobile money’s rapid popularity in Africa is attributed to the democratization of financial services.
However, unlike in many industrialized markets, the quick uptake and use among underprivileged populations is not due to convenience. Based on the need for unbanked individuals in Africa and the present banking sector’s subpar service caused by population growth. The lack of access to financial services, poor user experience in rural and isolated places, and costly to manage for this population add to the irritation of customers across the spectrum, making it an epicenter of mobile money. Even though Kenya and Ghana have lower smartphone penetration, the global momentum in mobile payments might return to Africa if financial institutions take the lead.
Compared to China, these two African nations’ mobile money payments make for a large part of their GDP,
the (BGC) states. Kenya has 87% GDP, Ghana has 82%, while the rest of Africa has less than 50%. Kenya and Ghana, on the other hand, account for majority of Africa’s mobile money market. In most other nations in the area, mobile payments account for less than 50% of all transactions. Over 400 million people in Sub-Saharan Africa utilize mobile payments, and that number is predicted to climb to 750 million in five years. Except for Covid-19, only Africa has 400 million users, $300 billion in mobile money transactions, $20 billion in mobile banking fees, and $3.5 billion in mobile payments earnings in 2020.
By 2025, Africa will have 750 million clients, $3 trillion in transactions, $30 billion in annual revenue,
and $20 billion in mobile payments. One of the businesses that has benefited greatly is the gambling industry, which is often the first option for many Africans to pay for bills, health care, and other services. In several African nations, the mobile wallet concept is quite popular among consumers.
These nations, among others, Ghana, Cote d’Ivoire, Mali, and Senegal, warmly welcome increased mobile service investment and continued improvements in the business climate and government Some facts contribute to considerable African mobile payment prospects. They affected industries including iGaming, e-commerce, and SMEs.
Interestingly, financial institutions may help create new income sources in the industry.
It emphasizes the importance of interoperability, social regulations, and competition in mobile transactions. If services are created strategically, how quick the payment is the key to the business and positioning as a requirement, top retail banks will capture just 20% or more of the mobile wallet market.