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Money on the move has Africa clicking

June 25, 2013 • Lists

The ability to transact, to withdraw, deposit and manage personal finances anywhere at anytime is an attractive proposition for consumers. This is one of the core advantages of mobile banking services that mobile service providers and financial institutions are looking to invest in- and transfer to their markets.

Another driver behind the market is the intention to bridge the gap between Africa’s increasing number of un-banked citizens and its banked community, particularly in terms of access to banking services.

Mobile money service is growing in relevance and focus as businesses across Africa seek to solidify offerings and stake a claim within this high growth marketplace.

Media reports have described Africa as the second largest mobile market globally, it is not surprising that the volume of mobile consumers, number of devices and increased access to broadband & connectivity have all combined to spur the growth of mobile money.

According to the Global Voice Group, at the end of 2012, 65.67 million people in middle Africa regularly used mobile financial services. In the same year, financial transactions via mobile phones was recorded as $670 million.

Meanwhile The GSMA Global Mobile Money Adoption Survey stated that there are now more mobile money accounts than bank accounts in Kenya, Madagascar, Tanzania and Uganda, as well as more mobile money agent outlets than bank branches in at least 28 countries.

The consistency of news covering the mobile money market in Africa prompted its inclusion (and top spot) in ITNewsAfrica’s Top Tech Trends Shaping Africa list.

We also took note of the comments by organisers of the Mobile Money Africa 2013 Conference who stated that the continent accounts for 15 of the top 20 countries, globally, in terms of mobile money usage. They have also stated that an estimated 80% of adults remain un-banked and therefore the opportunity for growth is substantial.

We now delve deeper into what regions have focused on mobile money platforms, what industry partners have emerged targeting this space and what solutions have been rolled out thus far.

This is a broad overview of a select group of offerings that exist in the market, what is offered to consumers and what they are based on. In listing these offerings, we have taken into account there longevity in the market, what is offered, their backing/ level of support and where their sphere of influence lies.

In this list readers will notice a mixture of well-established offerings and ‘new kids on the block’ – a reflection of the growth in the market and the increasing level of interest by companies to leverage off the growth.

1 M-Pesa

M-Pesa, is a branchless banking service, run by both Safaricom in Kenya and Vodacom Tanzania. The ‘M’ stands for mobile, while ‘Pesa’ is the Swahili word for money.

This service allows users, with valid ID, to deposit, withdraw and transfer money with a mobile device.

A report by PayGate marketing director Robin Philip in the first quarter of 2013 stated that at that time there were 16 million M-Pesa accounts.

ICT for Development has written of M-Pesa: “It’s not that m-money initiatives in other developing countries have failed: there are an estimated 250m users of m-money services in emerging markets.  Just that they have not – yet – succeeded on anything like the scale of M-Pesa, withKenyaaccounting for 30% of all emerging market m-money transactions in 2011,”

There is little doubt that this offering is considered one of the more successful and established inAfricatoday.

M-Pesa is also behind the M-Shwari paperless banking service, providing access to a bank account via the mobile phone.

2. yuCash

yuMobile, the mobile network brand established in Kenya by Essar TelecomKenyain 2008, is the company behind mobile money service yuCash. The service can be accessed via phone or via a WAP portal.

It offers users the ability to pay bills, deposit and withdraw cash, send money and purchase airtime.

Other services provided through yuCash is the ability for recipients of money to initiate the transaction and request a certain amount of money. The company has also linked its Obopay service to yuCash, enabling additional services such as invitations, transaction history and short message with transactions.

The offering is provided through an extensive yuCash agent network which covers key regions throughout the country.

3. Orange Money

Orange Money is a mobile money service that allows customers to transact directly from a bank account using their Orange mobile phone. It is provided to the market via a partnership between Telkom Kenya and Equity Bank.

Research shows that the company is in the process of rolling the service out to 19 countries in Africa and the Middle East.

The strength of this offering is also reinforced by the backing of French telecommunications operator France Telecom-Orange.

There are a number of features attached to this offering, including mobile money transfer directly from a bank account, access to financial services through Equity branches, Orange shops and Orange Money Agents, access to credit facilities and the ability to pay for goods and services at shopping outlets.

Orange Money Services provides a platform for users to send, withdraw money, but also manage payrolls, solicit mini statements, acquire access to stock prices and forex rates.

4. WorldRemit

WorldRemit is an online global money transfer service through which customers are able to send remittances to a network of 100 recipient countries, via 30 ‘send’ countries, based on several payment options including debit card and credit cards.

The service offers a range of pay-out options including instant cash pickup, bank deposits, transfers to mobile wallets, door-to-door delivery and international airtime pop-up.

Research suggests that the offering is more established in Europe (in December 2012 WorldRemit was named best European money transfer company by the International Association of Money Transfer Networks), SouthAfricais listed as amongst the company’s ‘send’ countries.

5. eTranzact

eTranzact is a Nigerian multi-application and multi-channel electronic transaction switching and payment processing platform.

It was launched in 2003 and has established a product portfolio that covers key areas of the mobile money or e-payment space, including ATM, Internet, POS and Mobile.

It is also licensed to offer mobile money services to individuals, with specific focus on the un-banked customers.

The company has operations in Nigeria, Ghana, Kenya, Zimbabwe and the Ivory Coast.

* Image via Shutterstock

Chris Tredger, Online Editor

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