Mobile Money for the Unbanked in Emerging Markets

Abstract

Mobile money, together with mobile broadband, is likely to be the primary growth engine for emerging market mobile network carriers. The service is gaining popularity and is beginning to contribute considerably to telecom income.

There are still 2 billion individuals worldwide who do not have a bank account. This group is primarily located in less developed areas (Africa, part of Asia, and Latin America). A typical use case of a distant worker sending money to the family for living expenses is highly expensive for persons who do not have financial inclusion. Mobile penetration is substantially higher, allowing for these remittances to be sent in a cost-effective and simple manner. Because the system is based on feature phones and 2G technology, end users do not need to have the most recent smartphone or mobile broadband (SMS or Unstructured Supplementary Service Data-USSD channel).

The most common application is domestic remittance. Bill payments and merchant payments are two others. International remittances are now feasible across various operators as well (cross-MNO agreements). Globally, there were already more than 100 million active mobile money accounts in 2014, with services available in around 90 countries.