The total value of mobile money transactions in emerging markets is predicted to exceed $870bn in 2026, representing an increase of 60% from $550bn in 2021, according to a study from Juniper Research.
According to Juniper Research, which provides research and analytical service to the global hi-tech communications section, 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, thereby creating additional revenue streams, Juniper Research said.
The 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. Microloans were identified as a key way in which mobile money service providers can increase their revenue by delivering banking-like services.
Damla Sat, research co-author, 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.”
In addition, the study predicted that Africa and the Middle East will dominate mobile money transaction values over the next 5 years; accounting for 56% of the global emerging markets value by 2026. It recommends that vendors in Africa focus on expanding sophisticated mobile money services.
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