Mobile money is shaping up to be one of the most exciting areas in mobile communications, and is quickly transforming the way in which consumers and enterprises transact.

Mobile network operators (MNOs) are taking advantage of the growing popularity of mobile money to boost average revenue per user and counter the increasing pressure on voice revenues. Mobile money services have thus become central to growth strategies of MNOs. m-pesa, for instance, contributes to over 18% of Safaricom’s and Vodacom Tanzania’s service revenues.

New analysis from Frost & Sullivan, Analysis of the Mobile Money Market in sub-Saharan Africa – Selected Countries, finds that the market earned revenues of $655,8-million in 2014 and estimates this to reach $1,319-billion in 2019. The study covers mobile payments and mobile money transfers (MMTs).

There has been a substantial rise in the adoption of mobile banking services as the majority of Africans have limited access to traditional banking services. With the expansion of mobile infrastructure and availability of affordable smart devices, it has become easier for consumers to gain access to banking services on their mobile devices than through costly traditional banking channels.

“Governments in Sub-Saharan Africa have come to realise that mobile money is key to improving the region’s financial inclusion,” says Frost & Sullivan ICT industry analyst Lehlohonolo Mokenela. “Consequently, they are looking to create an enabling environment for MNOs to deliver mobile money services for the large unbanked and underbanked population.”

Nonetheless, the volume of mobile money transactions will be kept in check by the lack of interoperability between operators’ solutions and restrictions on cross-border transactions. Concerns on the security and reliability of mobile money solutions, particularly in markets with intermittent network access, will also challenge market development.

“As the market is still in a somewhat early stage of development, it is dominated by MMTs between subscribers of the same operator,” says Mokenela. “There are, however, early signs of agreements to enable inter-operator mobile money transactions that will allow customers to complete transfers across national and global operators.”

Service providers need to increase their mobile agent networks and enter into partnerships, with other providers in the ecosystem, in order to fuel the uptake of mobile money services. They should also expand the application of mobile money beyond basic transfers to more innovative integrations of the service in consumer-to-business transactions.

Meanwhile, MNOs must ensure that their distribution networks are accessible and reliable through float management and customer service training.