Main Figures
$40B
Mobile Money Transaction Potential
73%
Cash Based Transactions
$4.3B
Domestic Cash Transfer in Agencies
Market Description
Activities: mobile payments, digital wallets, peer-to-peer payments, online payments, bill payments, smart cards, telecom payments, prepaids payments
Mobile money has a strong potential, as a solution to high cost-to-serve for low-income clients and low banking penetration rate (44%)
Use cases currently focus on peer-to-peer transfers and bill payments, with unexplored potential in other payments & services:
- At this point, main usage of mobile money is peer to peer money transfers
- Market is slightly conducive for future growth as latent demand is mitigated by payment institutions that already serve unbanked population, offering cash-based domestic transfers & services
- Otherwise, mobile money appears as a lower-cost solution with stronger accessibility (quasi-full mobile penetration combined to a widespread network of small retailers to be leveraged)
- In the short term, digitalized bill payments (public utilities & services) and C2G-G2C transactions are expected to drive up the market – Government along with the central bank appear to be fully engaged in promoting such transactions
- Going forward, and depending on the level of adoption, C2B merchant payments (esp. small retailers) and B2B wholesale transactions will kick off, securing and sustaining mobile money’s adoption – Other C2B and B2B use cases could be developed via large ecosystems (marketplace, online services, ad websites…) and aggregators (ex. agro-cooperatives, …)
Regulation
Functionalities of a new entrant wallet will depend on the choice to own a payment institution license or to partner with a licensed player
Closed-loop payment wallet is allowed without licence: a player can sell or reward customers with prepaid credits, to be spent to purchase a stated list of products / services already on its balance sheet. The customer is entitled to cash in through PSP or at any POS and to do P2P transfer, but cash-out & payment outside player’s network are not allowed
Mobile payment activities are regulated by the central bank
- Mobile wallet products are allowed only for licensed payment institutions
- Link to the law
- Full interoperability has been put in place since 2018
- Credit/credit intermediation or overdraft are not allowed for payment institutions
- 3 level of accounts exist
- Up to $20 with only SIM card
- Up to $500 with ID verification
- Up to $2K with ID verification & proof of address
Competitive Landscape
Non licenced players have emerged with business models not requiring the licence
Main actors in mobile payments are licenced payment institutions
- Those are mainly bank & TelCo subsidiaries and offer similar services than mobile money