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Upside Growth Forecast for Mobile Money Services

Over the past three years, mobile money services have blossomed across a range of markets in developing Asia and sub-Saharan Africa. Encouraged by the astonishing success of Safaricom’s M-PESA in Kenya, other mobile network operators have sought to emulate it by deploying their own range of transfer and remittance options, thereby reaping substantial rewards from their deployments.

Nearly 400 million mobile phone users worldwide are expected to use their handsets for mobile money transfer by 2018, that's up from just under 150 million this year, according to the latest market study by Juniper Research.

Growth is expected to be driven primarily by deployments of domestic money transfer services, with multinational network operators increasingly launching products on a group-wide rather than an ad hoc basis.

Findings from the market study stressed the need for mobile network service providers to ensure that support infrastructure -- including an extensive agent network -- needed to be in place well in advance of commercial launch.

Juniper suggested that the agent-to-subscriber ratio should be no greater than 1:500 to ensure a high proportion of active users, with strong agent concentrations at the outset in key urban areas within developing markets.

The study findings also identified the key criteria for Mobile Money Incubators -- assessing the optimal conditions to nurture mobile money service deployment and development, and highlighting markets which fulfilled these criteria.


How New Taxes Could Halt Adoption

However, Juniper cautioned against the imposition of new taxes on mobile money services, such as those recently introduced in Kenya and Uganda.

"While the impact on the Kenyan market appears to have been limited thus far, we should point out that this is the most mature mobile money market," said  Dr Windsor Holden,  research director at Juniper Research.

The introduction of a similar government tax in a market in the early stages of service adoption could serve as a severe brake on growth or make potential service providers reconsider planned deployments.

Other findings from the market study include:
  • Airtime top-up is now viewed as the primary mobile international remittance opportunity.
  • Money transfer platforms are becoming increasingly modular and flexible to enable integration of future bolt-on services.

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