Brand Updates & Reviews News Around

Mobile money accounts grow to 1.2 billion in 2020

As the GSMA published its annual ‘State of the Industry Report on Mobile Money’, it showed an increase in mobile payments and trasactions during the pandemic, considering the lockdown limitations and restriction to movement at financial institutions. According to the report, the number of registered accounts increased by 13% globally in 2020 with over 1.2 billion– double the forecast. Markets where the government provided pandemic relief to citizens showed the fastest growth.

It was seen that the government distributed financial aid to people and businesses in order to minimise the economic toll of COVID-19. This resulted to a value of government-to-person payments that were quadrupled amidst the pandemic, with the mobile money industry working hand-in-hand with administrations and NGOs to aid individuals with social protection and humanitarian payments quickly, securely, and efficiently to those in need. Not only this but, mobile money providers have also provided in-kind support, which includes  the distribution of personal protective equipment (PPE) and hand sanitising gel at agent counters.

We see that mobile money is a powerful tool for expanding the financial inclusion of women in low- and middle-income countries,” said John Giusti, the GSMA’s Chief Regulatory Officer. “This year’s report, however, found that across markets women are still 33 per cent less likely than men to have a mobile money account. The GSMA and its members are committed to closing this gender gap by addressing the barriers that prevent women from accessing and using mobile financial services.”

To close the gap between any two parties, requires a collaborative and concerted effort. In this case, many providers have shown to increase the proportion of female customers.

This was for the first time in the world that more than $1 billion was sent and received in the form of remittances globally every month via mobile money. Regardless of the fear of declined transaction as people worldwide suffered job losses and income cuts during the pandemic, it remained clear that diasporas continued to support family and friends back home. As a result, the total value of transactions increased by 65% to an annual total of $12.7 billion in 2020. In working towards achieving the Sustainable Development Goals (SDGs), the GSMA remains committed to reducing inequalities among countries when sending money internationally.

According to GSMA’s research, mobile money provides an affordable channel for connecting people to vital financial resources. The mobile money ecosystem has been strengthened by an increasing number of strategic partnerships established between money transfer organisations and mobile money providers.

Driving regulatory change

As the COVID-19 pandemic negatively impacted people’s lives and weakened economies, regulators responded with a variety of measures aimed at reducing the impact. The research found that the pandemic gave fresh urgency to the need for regulatory change to facilitate greater digitalisation. In many markets, transaction limits were increased to allow more funds to flow through mobile money. Additionally, as demand rose for non-physical payments, some regulators classified mobile money agents and their supply chains as essential services. Over 50 per cent of mobile money agents were continuously active throughout the pandemic, which was crucial for service continuity and maintaining liquidity.

While some of the regulatory reforms made in response to the pandemic have been positive for customers and providers, the implementation and extension of fee waivers has had a negative impact on mobile money providers’ core revenue stream. Mobile Money providers depend mainly on transactional revenues to sustain their business. Regulators are strongly encouraged to work closely with the industry to ensure sustainability going forward.

Related Articles

Google Lens can now recognise over one billion items

Isra Shams

AT&T, Nestle, Epic pull ads from YouTube over videos exploiting children

Isra Shams

PTI becomes the second most popular political party in the world

Yumna Tirmizi