It doesn’t look like the hub of an online bank. But that’s what the yellow and blue metal kiosk becomes when Albert Agane locks himself behind the metal bars every day at 6am.

From his perch along a dusty suburban thoroughfare in Accra, the 28-year-old helps fellow Ghanaians withdraw or deposit cash for accounts they operate from their mobile phones. All they need do is text.

Mobile money is the fastest-growing source of income for wireless-network operators like MTN and Vodafone’s Safaricom unit, outpacing data since many Africans don’t have the latest smartphones. They need agents like Agane because ATMs and bank branches are out of reach, or too costly. “In a village, where there are no banks, you can go to an agent and transact,” said Agane, who earns a commission of about 1% for moving as much as 20 000 cedis ($3 700) a day.

“Once people have phones there’s no need for a bank account.”The service has become an indispensable part of how Africa’s 1.2 billion people live, from buying funeral cover to borrowing money. The number of registered users in Ghana soared 11-fold between 2013 and 2017, International Monetary Fund data shows. Across the continent in Kenya, where it was pioneered, the value of such transactions amounts to almost half of gross domestic product, according to the World Bank.Sub-Saharan Africa has more mobile-money accounts than anywhere else in the world with about 396 million registered users at the end of 2018, a 14% increase from a year earlier, according to the GSM Association.

As it catches on around the world, South Asia saw 29% growth in 2018, and it was 38% for East Asia and the Pacific.“There are a lot of partnership opportunities with immense revenue potential for both mobile-network operators and banks,” said Patrick Quantson, head of digital transformation at the Accra-based unit of Standard Bank, Africa’s largest lender. “The mass appeal of mobile-money services and the mode of delivery also presents an opportunity to scale financial products to all market segments, at incredibly lower costs.”

It’s easy to see why Agane-one of 182 000 mobile-money agents-is busier than the ATMs around Ghana’s capital city. There are more than 1 740 such outlets per 100 000 people in the country, compared with only 11.7 ATMs and 8.7 bank branches, the IMF data show. “We’ve seen that people in the informal sector, who would have kept their money under pillows, move into mobile money,” said Eli Hini, general manager for mobile financial services at MTN Ghana, which controls about 78% of the active-customer market.

“Now, when there are floods people don’t lose their money. They’d rather get interest paid on it.” Banks don’t lose out because the mobile-phone companies park deposits with them, giving them cheaper access to funding.MTN and Sanlam, Africa’s largest insurer, last month announced that the continent’s biggest wireless network operator will offer funeral and other life-cover products through its digital channels spanning 237 million subscribers in 21 markets. Vodafone’s Johannesburg-based Vodacom Group last year bought a stake in Safaricom, based in Nairobi, from its parent to gain access to its M-Pesa money-transfer service, helping to double earnings from financial services. Vodacom last year made 11 billion transactions worth R2trn to 36 million customers.

The potential stretches to Nigeria, Ethiopia and Egypt, where reforms could add 110 million mobile-money accounts in the next five years, the GSM Association said in February. There’s more to come, said Martison Obeng-Agyei, who heads Vodafone Cash in Accra. There were about 31 million mobile-voice subscriptions in the country of 29 million people, and 12.1 million active mobile-money accounts at the end of 2017, from just 345 400 five years ago, Bank of Ghana data show.

“There’s huge prospects,” he said. “One of the things that was lacking in our financial system was the ability to move funds around. Businesses have been established because of mobile money.” While Agane hasn’t been robbed in his four years as an agent, he stays alert. A company comes around to exchange hard cash for electronic money to lower the chances of being targeted, like a vendor Agane heard of across town, who was attacked with a cutlass.

“There are so many risks,” he said, especially with the kiosk open until 9pm. “But there’s no jobs. If you don’t do it, there will be no food on your table.”

Source: https://www.fin24.com/Companies/ICT/mobile-phones-are-replacing-bank-accounts-in-africa-20190813

In its latest research, Worldwide Mobile Money Modernisation and Monetisation (a.k.a. Modern Mobile Money 2017), TeleResearch Labs finds modern mobile money players to have achieved average revenue growth of up to 18% — by selectively investing in modern mobile money systems, APIs/ services, & user experience [1q 2017]. 

The research further portends this trend to continue bolstering from previous 18% to 24% by the year 2022. "Thanks to the stiff attitude of over 85-90% players who’re (still) clinging to the 'sub-traditional’ offerings (read "business models”); & ways of consumer handling (read "servicing & delivering”), all focussed solely on onboarding without any credible plan of/ for fast monetization & repeat business".

“It appears many have forgotten the dog and following the tail”, Oscar Mine, Principal Analyst at TeleResearch Labs criticising the present state of the industry. "There’re so many gaps, opportunities that nearly no-one is exploiting especially when retail, commerce, banking, & payment systems have all merged at large presenting opportunities never known before . . . It is disappointing to see Mobile Operators trying too hard becoming a replica of the Banks, forgetting they had a role to play; a role Banks underperformed. A Role that Customers demanded to be cut out from conventional chains and be given to outsiders”, he continues.

Having analysed over 500 business models [of approx. 280 unique businesses], the Report cites Equitel as an example of one such "Modern Mobile Money Business" that has challenged the odds and come out reporting strong growth of revenues outperforming the previous leaders in its market. In less than 2 years of (its) launch, Equitel is now the 2nd largest mobile money service provider in Kenya, as far as mobile money 'transaction values' are concerned. More interestingly, Equitel money has the mobile money subscriber share of only 4%; however, it accounts for 20% of the total mobile money transactions by volume, and 22% of total mobile money transactions by value, respectively by the end of 2016. The achievement of Equitel is noteworthy as M-Pesa has had the monopoly in Kenyan market before Equitel had even begun its operations. The research concludes “Modernisation' as the ultimate way, hinting at the mix of advanced technologies, innovation, & gratifying end-user experience for sustained growth.

TeleResearch Labs’ thought provokers~

What makes a successful “modern” mobile money business?

How modernity best be induced across Infra > to Servicing > to Executions for faster turnarounds?

Building & Maintaining a robust technological infrastructure for gains?

How can businesses (operators, banks, fintechs) determine the level of modernity present or missing from their offerings?

What is Hypergrowth? How are mobile money businesses achieving superfast results?

What’re some latest, top notch traditional/ non-traditional initiatives of Banks (& Partners)? Gaps in servicing, and How can payment banks exploit those vulnerabilities?

What are some most credible ‘mobile money— online/ offline’ offerings available to different mobile money players [mainly—mobile operators, banks, and fintechs], for the financial inclusion of the under-privileged?

How by further tweaking these offerings can be emulated/ applied to another extension of users?

The answer to these questions and many noteworthy cases of "modern mobile money" built upon hypergrowth models with revenue earning opportunities — in both developed and emerging markets— have been analysed in the Report, Worldwide Mobile Money Modernisation & Monetisation 2017-2022.

This "first-of-its-kind" research attempts to unlock sleuth of critical insights via pointing at transformative impacts of the existing "sub-traditional" systems in mobile money industry across both developed as well as emerging markets,” says David Brown, Senior Consultant, BFSI.