Africa is gearing up to take advantage of the wealth of opportunities presented by mobile money services, according to the latest insights from global IT market intelligence firm International Data Corporation (IDC). 
Referencing its Mobile Money: Telcos Scramble for Africa report, IDC expects to see an increase in mobile money subscribers and revenue across the continent as telcos gradually overcome a range of persistent challenges such as tough regulatory environments, poor penetration strategies, limited distribution/agent networks, and poor consumer education.

“Competing mobile money ecosystems (that is telco-driven and bank-driven models) continue to be an ongoing bone of contention,” says Leonard Kore, a research analyst for telecommunications and media at IDC East Africa. “Countries such as Kenya and Tanzania that have MNO-led mobile money ecosystems have more robust growth than their counterparts with bank-led ecosystems, including Nigeria.

“The widespread reach of their agent networks, their technological superiority, and their ownership of network infrastructure, coupled with their large marketing budgets, combine to make MNOs better candidates to lead the development of mobile money ecosystems.”

Kenya is clearly an outlier in mobile money service adoption globally. Transactions in the country have grown annually since their launch in 2007, growing 24,7% year on year in 2014 to total KES 2,4-trillion ($26,17-billion).

This exceptional growth is expected to continue following government attempts to digitize public-sector procurement and regulatory efforts aimed at introducing cashless payment systems across the country’s public transport sector.

And while a great deal can undoubtedly be learnt by examining Safaricom’s business model in Kenya, as well as by dissecting the key reasons why mobile money services work so well in the country, Kore warns telcos and banks in other parts of Africa that replicating Kenya’s M-Pesa strategy will not automatically result in universal success across the continent.

“For mobile money to succeed in Africa, providers should focus on educating citizens on the benefits of the concept, simplifying the message for the poor/unbanked segments and communicating value-added propositions to the middle class and banked populations,” Kore says.

“Other important key factors include expanding distribution networks, the need to embrace interoperability, establish a proactive and supportive regulatory environment, develop an effective partnership ecosystem, and introduce value-added services like micro credit in more mature markets.”

IDC’s “Mobile Money: Telcos Scramble for Africa” provides an insight into emerging mobile money trends in Africa. The report presents an overview of growing mobile money usage in Africa and looks at the key drivers and challenges shaping the continent’s mobile money market. Kenya, the most successful use case of mobile money services, is assessed and compared with other African states deploying mobile money systems, while the report also explores the evolution of the mobile money ecosystem and provides key strategic guidance for the major players operating within that ecosystem.