Mobile Money in Emerging Markets

Mobile Money in Emerging Markets is a comprehensive report from Berg Insight analysing the latest developments on the mobile money and remittances markets. This strategic research report from Berg Insight provides you with 130+ pages of unique business intelligence and expert commentary on which to base your business decisions. This report will allow you to: Profit from 30 new executive interviews with market leading companies. Learn from valuable insights about successful mobile money deployments. Identify the leading mobile money platform providers in emerging markets. Understand the ecosystem required for providing financial transaction services in the mobile environment. Realize how mobile phones are being used for subscriberto- subscriber financial transactions within and between countries. Predict the number of users and transaction volumes for mobile money services until 2015.

Additional Information

Executive summary

Mobile financial services are causing a significant transformation in the financial services, payments and international remittance industries. The mobile phone is changing how customers conduct their financial activities, leading to an extended reach and increased operational efficiency among financial service providers in emerging markets. In the longer term mobile money services are facilitating the increasing share of digital transactions in emerging markets, where cash transactions still dominate. A growing share of international remittances is being electronically disbursed into mobile money accounts. Mobile phones are also being increasingly used to send remittances.

Berg Insight defines a mobile money subscriber as a person or business who has registered for a mobile money account. Mobile money accounts comprise accounts from which transactions such as person-to-person transfers or bill payments can be made using a mobile phone. Berg Insight’s definition of a mobile money account does not encompass services limited to information services and simple transactions such as airtime top-ups and transfers between own accounts. It does not include services that use mobile operator billing as a payment source.

Mobile money services are increasing the availability and access to financial services for lower-income segments of the population, which previously has not been possible to serve profitably. The mobile phone will be the first digital banking channel for a majority of the unbanked populations in many emerging economies. The number of live mobile money deployments has grown at an explosive rate over the past two years. Berg Insight’s in-depth study of the industry indicates that there are currently around 300 mobile money deployments live in emerging markets. Over half of these have been launched by mobile network operators and third party service providers. The remaining deployments have been launched by financial institutions.

The number of mobile money subscribers in emerging markets is forecasted to grow from 133 million users in 2010 at a compound annual growth rate (CAGR) of 40 percent to reach 709 million users in 2015. The total value of mobile money transactions will simultaneously grow at a CAGR of 54 percent from US$ 25 billion in 2010 to US$ 215 billion in 2015. Asia- Pacific is expected to become the most important regional market, accounting for more than half of the total user base.

The global remittance market has grown rapidly over the past decade. In 2010 remittances through formal channels amounted to US$ 440 billion, of which, developing countries received an estimated US$ 325 billion. The vast majority of these transactions are still cashto- cash transactions, but the share of digital transactions is steadily increasing. Driven by the development of mobile money systems in emerging markets, Berg Insight estimates that US$16 billion worth of international money transfers will be received with mobile phones in 2015. Similarly, US$ 5.5 billion worth of international remittances will be sent using mobile phones in 2015.

International airtime transfer is a rapidly growing niche within the overall international value transfer market. It is a low margin high volume business, with a small number of leading service providers in the field. There are a large number of smaller vendors who have joined the airtime transfer market more recently. Berg Insight estimates that the total value of international airtime transfer will grow from US$ 130 million in 2010 at a compound a CAGR of 67 percent to reach US$ 1.67 billion in 2015.

Many new companies have entered the mobile money industry as technology vendors in the past year, including the likes of Ericsson, SAP and Gemalto. The competitive landscape is intense with around 70 vendors competing in the industry, of which many need to reach a critical mass of deployments over the next two years in order to stay in business in the longer term. Yet, the level of consolidation among technology vendors serving MNOs and third party service providers is high, with around 75 percent of mobile money deployments running on the platforms of five leading vendors. In contrast, the landscape among vendors providing financial institutions is highly fragmented with no clear leaders.