Asia Pacific to drive mobile money market, accounting for over 50 percent of total user base

The number of mobile money subscribers in emerging markets
is likely 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,
according to Berg Insight.

Active users of mobile money services will double in the
next 2 years. Mobile financial services are causing a significant
transformation in the financial services, payments and international remittance

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
operators and third party service providers. The remaining deployments have
been launched by financial institutions.

In 2010 remittances through formal channels amounted to $440
billion, of which, developing countries received an estimated $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 $16 billion worth of
international money transfers will be received with mobile phones in 2015.
Similarly, $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. The total value of international airtime
transfer will grow from $130 million in 2010 at a CAGR of 67 percent to reach
$1.67 billion in 2015.

“In developing regions such as Africa, the mobile phone will
become the primary digital channel for people to conduct financial services in
the coming years. Financial institutions are beginning to realize the
importance of mobile phones to reach new clients viewing mobile money services
as high-priority strategic projects. Also mobile operators and third party
service providers are ramping up their efforts to target the huge unbanked
populations in emerging markets,” said Lars Kurkinen, telecom analyst, Berg

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.

By Team
[email protected]