Mobile Money in Emerging Markets – 2nd Edition


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Executive summary


Mobile money is causing a significant transformation in how banked and previously unbanked people in emerging markets are conducting their financial activities. These services play a central role in extending the reach of formal financial services to the unbanked and financially underserved populations in emerging economies. Furthermore, the mobile phone is the first self-service banking channel for a substantial share of the already banked individuals. In some countries mobile money services have already matured to the extent that significant business opportunities are emerging for companies from adjacent industries, such as insurance providers and merchant acquirers.


The number of registered mobile money accounts in emerging markets is forecasted to grow from 323 million in 2011 at a compound annual growth rate (CAGR) of 25 percent to reach 1.24 billion by 2017. Approximately 225 million of the registered accounts in 2011 were in Asia-Pacific and Chinese banks alone accounted for approximately 150 million of these. Around 97 million accounts of the total have been registered through mobile-centric branchless banking initiatives such as M-PESA. The concept has thus far been most successful in Africa, where 81 percent of all mobile money accounts have been registered through a mobile-centric branchless banking service. The number of active mobile money users in emerging markets is forecasted to grow from 61 million in 2011 at a CAGR of 36 percent to reach 381 million by 2017. Active users are defined as individuals who have used the mobile money account during the past three months to make a payment, send money or receive money. The growth in activity levels and the number of users is resulting in a rapid increase of transaction volumes. The total value of mobile money transactions in emerging markets reached US$ 44 billion in 2011 and is projected to grow at a CAGR of 44 percent to reach US$_395 billion in 2017. In 2011, Mobile money transactions in Africa stood for 63 percent of the total value and Kenya alone accounted for US$ 13.2 billion.


The majority of mobile money services that target the unbanked have thus far been launched by mobile operators such as MTN Group, Bharti Airtel, Orange, Tigo, Digicel, Vodafone, Safaricom, Globe Telecom and Smart Communications. However, the level of interest from financial institutions has grown rapidly during the past year. Financial institutions that already have launched mobile-centric branchless banking services include several international groups and large domestic players such as Standard Bank, Barclays Bank, Dutch-Bangla Bank, BRAC Bank, GTBank and UBL. A range of new start-ups and other providers have also launched mobile money services. These companies include Celpay, MobiCash, Cellular Systems International, Movilway and M Service. The fourteen leading mobile money platform vendors have today an installed base of 307 mobile money deployments, of which 141 have been installed at financial institutions, 135 at mobile operators and 31 at other organisations. The six largest vendors serving mobile operators have provided the platforms for more than two thirds of the installations showing a relatively consolidated market. The vendor landscape that serves financial institutions is in contrast highly fragmented. Market conditions are also changing as large corporations such as Visa, SAP, Temenos, Infosys, Ericsson, Gemalto and Oberthur Technologies recently have entered the mobile money platform market. Several of these vendors are leveraging assets from adjacent businesses to create new types of value propositions, which can lead to a shift in the competitive dynamics.


The evolution of mobile money ecosystems in emerging markets is also driving the share of international money transfers that are sent to mobile money accounts. Berg Insight estimates that remittances sent to mobile money accounts will grow at a CAGR of 55 percent from US$_850 million in 2011 to US$ 12 billion in 2017. In addition to money, value is also being transferred in the form of prepaid airtime. The value of airtime sent internationally has more than doubled year-on-year in the past years and is on track to double again in 2012. Berg Insight forecasts that the total value of international airtime transfers will grow from US$ 350 million in 2011 at a CAGR of 52 percent to reach US$ 4.4 billion in 2017.



Table of Contents


Executive summary.1

1 Mobile money in emerging markets 3

1.1 The opportunity for mobile money 3

1.1.1 The unparalleled reach of mobile phones 4

1.1.2 Extending the reach of formal financial services 6

1.1.3 Serving banked consumers better and more efficiently .6

1.1.4 Mobile money and branchless banking7

1.2 Mobile money services8

1.2.1 Basic services and partnership-enabled services.9

1.2.2 Advanced mobile financial products and microinsurances11

1.2.3 Mobile payments at merchants.12

1.3 The main challenges .13

1.3.1 Creating a value proposition and driving usage .13

1.3.2 Building, incentivising and managing agent networks .16

2 Mobile money service providers19

2.1 The value of a mobile money system19

2.1.1 Value components 19

2.1.2 Network effects21

2.1.3 Orchestrating the evolution of an ecosystem .23

2.2 Service providers.24

2.2.1 Deployments launched by service provider category 24

2.2.2 Mobile operators .26

2.2.3 Financial institutions29

2.2.4 Third party service providers.31

2.3 Deployment statistics 32

2.3.1 Deployments launched by region .33

2.3.2 Registered mobile money users .34

2.3.3 Active mobile money users .36

2.3.4 Mobile money transactions .38

2.4 Case studies 39

2.4.1 Financial institutions lead mobile money in South Africa .39

2.4.2 The growth of mobile money in Kenya .43

2.4.3 Celpay finds early mobile money success in B2B services46

2.4.4 MTN Group views mobile money as a key strategic area for future growth.48

2.4.5 Kopo Kopo enters the emerging merchant acquirer market in Africa 50

2.4.6 Tigo succeeds with mobile money in Paraguay after re-launch.53

2.4.7 India reaches 36 million registered mobile money accounts .54

2.4.8 Movilway targets mobile money opportunities in Latin America 56

3 Mobile money platform providers59

3.1 The platform for mobile money services .59

3.1.1 Technical overview of a mobile money platform.59

3.1.2 Requirements from service providers .61

3.2 Market overview.62

3.2.1 Leading technology vendors by target customer group 62

3.2.2 Competitive landscape64

3.2.3 Pricing models.66

3.3 Mobile money platform vendor profiles.68

3.3.1 C-SAM .68

3.3.2 Comviva.70

3.3.3 Ericsson.72

3.3.4 eServGlobal.74

3.3.5 F1Soft 76

3.3.6 Fundamo .77

3.3.7 Gemalto.79

3.3.8 Infosys .81

3.3.9 InterAcct Solutions 83

3.3.10 Halcom83

3.3.11 M-Com (Fiserv)84

3.3.12 mFino 85

3.3.13 Monitise .86

3.3.14 MoreMagic.87

3.3.15 Pozitron .88

3.3.16 ProgressSoft89

3.3.17 S1 (ACI Worldwide).90

3.3.18 Sybase 365 (SAP) .90

3.3.19 Tagattitude 92

3.3.20 Telepin Software94

3.3.21 Temenos95

3.3.22 Utiba 96

3.3.23 YellowPepper 98

3.3.24 ZTE 99

4 Mobile international remittances101

4.1 The international remittance landscape 101

4.1.1 Formal money transfer flows.101

4.1.2 Informal money transfers 104

4.1.3 Cost of remitting money105

4.1.4 Regulations .107

4.1.5 Success factors for remittance services .107

4.2 Remittance methods110

4.2.1 Structure of a remittance operation 111

4.2.2 Remittances through a physical agent network112

4.2.3 Remittances through electronic channels.113

4.2.4 International airtime transfers114

4.3 International value transfer market analysis 115

4.3.1 The competitive landscape for consumer-to-consumer remittances .115

4.3.2 The competitive landscape for international airtime transfers 118

4.4 Case studies 120

4.4.1 Remittances to M-PESA accounts in Kenya .121

4.4.2 Globe refocuses GCASH offering from remittances to mobile money.122

4.4.3 Western Union expands mobile remittance partnerships.123

4.4.4 MoneyGram accelerates mobile remittance strategy .124

4.4.5 Boom Financial Services launches US–Mexico mobile remittances 126

4.4.6 HomeSend builds mobile-centric hub for international remittances 126

4.4.7 Tranglo builds position in international value transfers 127

4.4.8 TransferTo records 150 percent growth in airtime transfers volumes 128

4.4.9 Ezetop maintains leading position in the cross-border top-up market.129

5 Forecasts and conclusions131

5.1 Mobile money forecasts and analysis by region.131

5.1.1 Africa134

5.1.2 Asia-Pacific 137

5.1.3 Latin America.139

5.1.4 Eastern Europe, Middle East and Central Asia (EMECA).142

5.2 Mobile money service providers144

5.2.1 Organizational structures 144

5.2.2 Service offerings and long-term strategies .145

5.3 Mobile money platform vendors146

5.3.1 Platform development trends147

5.3.2 Changes in competitive dynamics 149

5.4 Mobile remittances 150

5.4.1 Sending and receiving remittances with a mobile phone.151

5.4.2 Analysis of the mobile remittance opportunity152

5.4.3 Mobile C2C remittance forecast153

5.5 International airtime transfer 154

5.5.1 Service provider market shares 154

5.5.2 Forecasts and analysis155

Glossary 157


List of Figures


Figure 1.1: Infrastructure indicators for select countries in emerging markets (2011).5

Figure 1.2: Examples of basic and partnership-enabled mobile money services .9

Figure 1.3: Examples of advanced mobile financial products11

Figure 1.4: Marketing and customer adoption .15

Figure 2.1: Mobile money value components 20

Figure 2.2: Network effects in mobile money systems.22

Figure 2.3: Distribution of deployments by type of service provider (mid-2012) .25

Figure 2.4: Mobile operators by number of subscribers (2011).27

Figure 2.5: Mobile money deployments by operator group (December 2011) .28

Figure 2.6: Banking infrastructure in select countries (2010).29

Figure 2.7: Regional distribution of mobile money deployments (mid-2012) 34

Figure 2.8: Major mobile money deployments in emerging markets (2011) .35

Figure 2.9: Mobile money users by country (2011)37

Figure 2.10: Mobile money transactions by country (2011–2012) .38

Figure 2.11: Mobile and Internet banking customers at Absa Bank (2008–2011) .43

Figure 2.12: Mobile money transaction volumes in Kenya (2007–2011) .44

Figure 2.13: Mobile money subscribers by service provider in Kenya (Q4-2011) .44

Figure 2.14: Comparison of mobile money services (December 2011).45

Figure 2.15: Kopo Kopo’s advert for M-PESA merchant payments .52

Figure 2.16: IMPS transaction volumes (2010–2012).55

Figure 3.1: Illustration of a mobile money platform 60

Figure 3.2: Top platform vendors in emerging markets (Q2-2012)63

Figure 3.3: Overview of competitive landscape65

Figure 3.4: Pricing models for mobile money platforms 67

Figure 4.1: Remittance flows to different regions in US$ billion (2008–2013)102

Figure 4.2: Top 10 developing world recipient countries (2011)103

Figure 4.3: Average cost for sending US$ 200 between different countries (2011).106

Figure 4.4: Top factors influencing remittance service provider choice (2006) .108

Figure 4.5: Factors inhibiting use of formal channels for remittance transfers (2009).109

Figure 4.6: Remittance value chain 110

Figure 4.7: Illustration of a remittance operation ..111

Figure 4.8: Electronic sending channels 113

Figure 4.9: International C2C remittance industry market shares (2011).116

Figure 4.10: Key financial indicators of top remittance companies (2011) 117

Figure 4.11: Electronic channel remittances as share of revenues (2011) 118

Figure 4.12: Comparison of airtime transfer networks at receiving side 119

Figure 4.13: Remittance service outlets in Kenya (2011) .121

Figure 4.14: HomeSend pricing model 127

Figure 5.1: Overview of emerging markets (2011) .131

Figure 5.2: Mobile money accounts registered through branchless banking (2011) 132

Figure 5.3: Mobile money users and transactions in emerging markets (2011–2017) 133

Figure 5.4: Overview of Africa (2011)135

Figure 5.5: Mobile money in Africa (2011–2017) 136

Figure 5.6: Overview of Asia-Pacific (2011) 137

Figure 5.7: Mobile money in Asia-Pacific (2011–2017).138

Figure 5.8: Overview of Latin America (2011).140

Figure 5.9: Mobile money in Latin America (2011–2017) .141

Figure 5.10: Overview of EMECA (2011) 143

Figure 5.11: Mobile money in EMECA (2011–2017).144

Figure 5.12: Mobile money platform development trends148

Figure 5.13: Mobile remittance service cost comparison.153

Figure 5.14: Mobile international remittance transfer forecast (2010–2015) 154

Figure 5.15: International airtime transfer volumes (2011) .155

Figure 5.16: International airtime transfer volumes (2011–2017) .156

To order this report:

Payment_Processing Industry: Mobile Money in Emerging Markets – 2nd Edition

Nicolas Bombourg
US: (805)652-2626
Intl: +1 805-652-2626

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