Africa leads in mobile banking

Mobile banking activity is highest in Africa, led by Nigeria, South Africa and Kenya – which has the reputation for being the world’s mobile money pace-setter with M-Pesa.

This is according to a new report by mobile trade association, MEF, which analysed data from 10,000 respondents in 13 countries.

The MEF says that in 2013, 15% of all mobile media users analysed made some form of mobile payment or transaction to purchase goods – 7% of which did so through a mobile wallet.

While the MEF noted that mobile banking was widespread and in active use in most markets, the use of mobile wallets – which are typically tied to NFC-based transactions and services – are yet to reach mass-market adoption.

“Every week seems to bring news of a fresh mobile wallet launch. However, the research shows that users have so far failed to embrace these services in broad numbers,” MEF said.

The report also noted mobile banking activity dropping in India, Mexico and Brazil, as operators and financial organisations struggle to tap into a scaleable market for their mobile money services.

However, the firm pointed out, looking at Africa, the story is very different.

Africa’s mobile banking

According to the report, in the African cluster of countries studied, there is more mobile banking activity than the global average of 66% – with engagement rates in Nigeria, Kenya and South Africa at 76%, 92% and 78%, respectively.

MEF noted that South African mobile media users appear to occupy a place midway between the “developed market” and “growth market” consumer.

“For example, 43% of [South Africans] check balances by mobile. In Nigeria, it’s just 15%. But 45% send airtime. That’s something users in UK, US and China rarely do.”

Mobile Banking
Mobile Banking

Broadly, the MEF reported that Africans tend to use mobile to send airtime to other users, transfer funds and seek credit – though most of their data was skewed by Kenya’s massive use of mobile for banking.

“Kenya has a reputation for being the world’s pace-setter in mobile money. Globally, 66% of mobile media users use some form of mobile banking,” MEF said.

“For many observers, mobile money in Kenya equals one service: Safaricom’s M-Pesa. And no wonder. It has 15 million users and processes two billion transactions a day.”

M-Pesa is microfinancing service for Safaricom and Vodacom, which allows users to deposit, withdraw, and transfer money easily with a mobile device.

Aside from mPesa, Kenyans also use rival services like Zap and yuCash for mobile transactions.

“The research revealed Kenya to be ahead of other African countries in most mobile money activities. The most striking differences are in sending money to someone else (54% of mobile media users do this in Kenya, against 12% in Nigeria and 16% in Africa) and sending airtime,” MEF said.

M-Pesa in South Africa

Nedbank launched M-Pesa in partnership with Vodacom in August 2010, and boasts more than 1.2 million registered users.

In November 2013 Vodacom announced that it plans to relaunch M-Pesa during the first quarter of 2014.

Vodacom CEO Shameel Joosub said at the time that M-Pesa has “a couple of hundred thousands customers” locally.

Asked about the announcement, a Vodacom spokesperson told MyBroadband that it is part of the revamp that they are working on, with a full update expected in early 2014.

In December 2013, Nedbank said it aims to re-launch its mobile money service, M-Pesa, onto a new IT platform that will interface directly into banks.

“Nedbank and Vodacom have drawn valuable learnings and insights from the M-Pesa roll-out, and the M-Pesa product is being re-launched in the near future onto a new IT platform,” said Ilze Wagener, head of digital innovation and payments at Nedbank.

“[The platform] will interface directly into banks and will include the expansion of the distribution channel to add on more points of sale and more transactional capabilities,” she said.

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Africa leads in mobile banking