Of Course, Money Transactions are Going Mobile. Everything Else Has

April 21, 2023

two people discussing bank partnerships

A casual glance around any restaurant or any place people gather will tell you that, by and large, people are more connected to their mobile phones than they are to each other. Any parent with a child knows that one of the best ways to keep them quiet is by letting them play with a mobile phone. Any parent with a teen knows that they would rather engage with their phone than with you. And so, it is no surprise that making mobile money transactions will be the only way we will buy, send, and receive money in the very near future. Very near, like in now.

To illustrate the exponential growth of mobile transactions and why the financial world is rapidly developing myriad approaches, let’s wallow in the data pond:

  • 17.4 million: The number of mobile money agents in 2022, a 41% increase from the 12 million in 2021
  • $22 billion: The volume of mobile money-enabled international remittances, up 28% from 2021
  • 36%: The growth of bill payments, year-on-year, from 2021 to 2022, faster than any other year till date
  • Registered mobile money accounts increased by 13% year-on-year, from 1.4 billion in 2021 to 1.6 billion last year.

Although it took the industry 17 years to reach its first 800 million customers, it’s taken just five years to reach the next 800 million, thanks to rapid adoption of mobile phones, higher network penetration, and better regulation, and…

Never Waste a Good Crisis

COVID-19 provided a much-needed push for contactless payments. Visa reports that nearly 70% of card members say they will continue to use them after the pandemic. Let’s not diminish the societal changes in behavior due to the pandemic. A lot of technology that was sitting in the wings waiting for their time in the spotlight finally got their audition. Zoom call, anyone?

Making the World a Better Place, Right from Your Phone

“As the world continues to grapple with the challenges of poverty and inequality, mobile money will undoubtedly continue to play a critical role, improving the lives of people in some of the world’s most vulnerable communities.”
Ahmed Yusuf, CEO of Hormuud Telecom

1.4 billion people are still unbanked worldwide. But they do have phones. Let that sink in. A phone is more vital to their lives than a financial institution. Or a financial institution is too far to access. And so, it just makes sense, as the rest of the world spends over half their day on their phones working, communicating, banking, dating, ordering dinner, making reservations, and buying way too much of what they don’t need, that the other rest of the world should have that convenience too.

“It is clear that mobile money is driving financial inclusion around the world. As it continues to grow, it offers an incredible opportunity to reach the 1.4 billion people who still do not have access to financial services.”
— Mats Granryd, director-general of GSMA.

So much money is sent across borders today from family members and businesses in US to India, Africa, and South America and more. Once again, let’s go to the data:

  • Business-to-Business (B2B) transactions make up the largest share by far, expected to account for US $150 trillion.
  • Consumer-to-Business (C2B) transactions, such as cross-border e-commerce and offline tourism spend, are forecast to reach US $2.8 trillion.
  • Business-to-Consumer (B2C) transactions, which include wage salaries or interest payments, are expected to amount to US $1.6 trillion.
  • Consumer-to-Consumer (C2C), or remittance payments, contribute the least – expected to reach US $0.8 trillion.

All of these payments would be made easier with mobile payments. But consumers and businesses awareness needs to expand for the adoption of all new methods (tap-to-phone et al) and trust issues need to be continually addressed as the more mobile payments increase, the more nefarious players will seek to intercept them.

The entire mobile money ecosystem is evolving at a rapid pace. Mobile transactions will be essential moving forward. Societies will continue to evolve into cashless cultures. Emerging markets will begin to become more uniform in their acceptance of digital payments. All commerce is Amazon commerce now. All this illuminates the fact that the mobile phone is the greatest human invention since, well, money.

Big banks will get into it. Small banks will get into it. And they will look to Fintech to speed the process. Oh, and did you hear? Apple now offers a savings account.

Howard Davidson is the CMO at AlmondFinTech

Almond FinTech is a B2B technology company making financial services affordable and accessible to people around the world, regardless of income. Through our multi- blockchain cross-border transfer protocol, we remove financial barriers and deliver transfer and credit scoring tools that empower everyone, everywhere. www.almondfintech.com