The total value of mobile money transactions in emerging markets will exceed $870 billion in 2026, up from $555 billion in 2021; representing growth of almost 60 per cent. The figures are contained in a new study by Juniper Research
Mobile money in emerging markets includes micro-insurance, micro-loans, micro-savings and mobile money transfer.
Micro-loans
The new research, Mobile Money in Emerging Markets: Segment Analysis, Vendor Strategies & Market Forecasts 2021-2026, found that micro-loans will be the fastest-growing segment within mobile money, with growth of over 180 per cent over the next five years. The research identified micro-loans as a key way in which mobile money service providers can increase their revenue by delivering banking-like services.
Research co-author Damla Sat explained: “While micro-loans are, by their very nature, small-scale, they are growing rapidly in significance, by enabling users to access credit as financial inclusion rises. By offering these services to users, mobile money services can pre‑empt competition from banks, while increasing their average revenue per user; creating a virtuous circle.”
Growth will be driven by the transition of mobile money vendors, such as M-PESA, to the PaaP (Payments-as-a-Platform) model. This model enables mobile money vendors to offer their users access to third-party services such as eCommerce; creating additional revenue streams.
According to the study, PaaP is critical to increasing revenue for mobile money vendors, as smartphone adoption and user expectations grow. The new research recommends that mobile money vendors focus on building their ecosystems now by agreeing merchant partnerships to correctly leverage this opportunity.
The research also found that Africa and the Middle East will dominate mobile money transaction values over the next 5 years; accounting for 56 per cent of the global emerging markets value by 2026. It recommends that vendors in Africa focus on expanding sophisticated mobile money services, such as micro-insurance and micro-savings, in order to best address this rapidly growing opportunity.
