A new study from Juniper Research has found that the total value of mobile money transactions in emerging markets will exceed $870 billion in 2026, up from $555 billion in 2021; representing growth of almost 60%. Mobile money in emerging markets includes microinsurance, microloans, microsavings and mobile money transfer.
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“While microloans are, by their very nature, small-scale, they are growing rapidly in significance, by enabling users to access credit as financial inclusion rises. By offering these services to users, mobile money services can pre‑empt competition from banks, while increasing their average revenue per user; creating a virtuous circle.”
This growth will be driven by the transition of mobile money vendors, such as M-PESA, to the PaaP (Payments-as-a-Platform) model. This model enables mobile money vendors to offer their users access to third-party services such as eCommerce; creating additional revenue streams. The research identified PaaP as critical to increasing revenue for mobile money vendors, as smartphone adoption and user expectations grow. The new research recommends that mobile money vendors focus on building their ecosystems now by agreeing merchant partnerships to correctly leverage this opportunity.
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Microloans Represent Fastest-growing Segment
The new research, Mobile Money in Emerging Markets: Segment Analysis, Vendor Strategies & Market Forecasts 2021-2026, found that microloans will be the fastest-growing segment within mobile money, with growth of over 180% over the next five years. The research identified microloans as a key way in which mobile money service providers can increase their revenue by delivering banking-like services.
Research co-author Damla Sat explained: “While microloans are, by their very nature, small-scale, they are growing rapidly in significance, by enabling users to access credit as financial inclusion rises. By offering these services to users, mobile money services can pre‑empt competition from banks, while increasing their average revenue per user; creating a virtuous circle.”
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