Will Mobile Money Unlock Financial Services in Africa?

Emmanuel Okoegwale, Director of Operations and Projects at African Centre for Mobile Financial Inclusion, provides his expert perspective on Africa’s mobile payments ecosystem in this exclusive PYMNTS.com interview.

PYMNTS.com: Why have mobile payments in Africa taken off so quickly? What problem is it solving and for whom?

EMMANUEL OKOEGWALE: Mobile payment has a strong, compelling need in Africa where less than 20 percent of the total population has access to formal financial services. Internet and card services are still a challenge in many societies in Africa. Mobile is not only bridging the gap in some communities but might even serve as the first access to formal financial services for some groups of people.

Mobile payment is bringing financial services access closer to the masses in an affordable manner, effectively and efficiently. (Related Article: Mobile Money Moves to Africa)

PYMNTS: Who are the major players to watch right now? How has that changed over the last three years? Who will be the major players to watch in the next three years?

OKOEGWALE: Clearly, Safaricom’s M-PESA is not only the leader in Africa but across the globe with an active subscriber base of 16 million in Kenya alone. M-PESA is currently available in a number of African countries. Airtel Money and MTN MobileMoney in about 22 countries is another trailblazer, which is a network operator-led model. (Related Article: Mobile Payments go Viral: M-PESA in Kenya)

Orange money looks promising along with some financial institution-led initiatives across Africa.

Nigeria, which recently licensed 16 mobile money providers in a nation of 140 million people and 70 million bankable adults with only 25 million banks accounts, is a country to watch in the emerging mobile money space. UBA and Ecobank will play a significant role in the emerging ecosystem.

PYMNTS: What is the business model for the most successful players, and how is that different from other parts of the world, if at all?

OKOEGWALE: In Africa, the agency model has proven to be the winning formula, and that will be the position for a long time till mobile money acceptability amongst the merchants grows to the point that consumers do not really need to take out cash at agent points, rather spend directly from the mobile phone at merchant locations.

In other parts of the world, aside pockets of nations like Brazil and Bolivia, the power of the agents is yet to be unleashed yet. Hence, they cannot enjoy the full potentials of mobile money yet.

PYMNTS: What are some of the challenges unique to deploying a mobile payments system in Africa, and how does one overcome them?

OKOEGWALE: Infrastructural hurdles are significant as mobile network operators are still grappling with managing the voice networks. The mobile money platform is additional burden on the already struggling MNO infrastructure.

Building a credible agent network is also a challenge. However, the providers are all making headway around the challenges by exploring the cooperation model that shares the risk and rewards amongst the ecosystem players in an efficient and effective manner.

PYMNTS: How does the mobile payments landscape differ from country to country in Africa?

OKOEGWALE: Regulation is major influence in different country scenarios. In some countries, mobile payment is mobile network operator led, and in others, financial institutions and independent providers led. (Related Briefing Room: Mobile)

PYMNTS: How have merchants in Africa responded to the idea of mobile payments?

OKOEGWALE: Merchants have yet to realize the power of mobile payment in Africa. In some markets like Kenya where mobile payment penetration is high, merchants are actively involved in the value chain. Yet in many other African nations, merchants are still playing safe with the traditional cash payment methods.

PYMNTS: What is the one lesson learned from your work in Africa that you think others can apply to deploying mobile payments — in both developed and developing countries?

OKOEGWALE: Continuous training of the mobile payment agents is the key to unleashing the power and potentials of mobile financial services.

PYMNTS: What projects are you currently working on?

OKOEGWALE: I’m actively working on building a shared agent network, which might be the world’s most extensive and networked mobile payment agency chain that will serve 16 providers in Nigeria.

Bio: Emmanuel Okoegwale is a leading voice in the mobile financial ecosytem in Africa. He manages MobileMoneyAfrica.com, which is the continent’s leading resource for mobile financial inclusion. Okoegwale also actively serves on the advisory board of frontlineSMS credit in the US and the African Center for Mobile Financial Inclusion.

Related Content


Mobile Money Moves to Africa

Research and Markets: Mobile Financial Services in Africa Report

Mobile Payments go Viral: M-PESA in Kenya

Payments Around the World Briefing Room