Kathy Gibson reports from SATNAC 2015 – Global mobile penetration far exceeds the world’s population, which is an indication that it is enjoying rapid adoption.
Mobile Internet access is also growing rapidly, as is the use of social media services, says Suraj Ramlall, chief technology officer of Saab Grintek Technologies, speaking at the South African Telecommunications, Networking and Applications Conference (SATNAC).
Africa currently enjoys a mobile penetration of 78%, having completely leapfrogged landline solutions, Ramlall says. “So it is evident there is huge potential in Africa for mobile payments.”
The fact that people living in rural communities would traditionally have had to travel long distances to access funds argues that mobile payments must be a cost-effective solutions, he says.
One-third of the people living on the globe today have no access to financial services, Ramlall points out, which excludes them from participating in the economy.
Mobile payments can significantly change their lifestyle by giving them access to payments, transfers, insurance, credit and savings.
In fact, mobile payments have become mainstream in emerging markets, he says, usually as a service from the mobile network operator.
“In fact, 61% of developing countries have a mobile payment solution,” Ramlall says. The stumbling block at the moment is that most of these cannot be made across mobile operators.
Among the mobile financial solutions being offered in Africa are systems that allow users to withdraw and send cash from one cell phone to another and using local retailers as ATMs. Banks have also come to the party enabling the payment of third-party service providers, and allowing cell phone users to make ATM withdrawals without having a card.
A surprising 30% of cell phone users in Africa currently use their cell phones to make or receive payments, making it the third most popular use for mobile devices.
“Mobile transacting is becoming mainstream fast,” Ramlall says. “Estimates show that the mobile payment market will grow at a CAGR (compound annual growth rate) of 20,4% over the next five years and will account for $830-billion by the end of 2020.”