For centuries cash has been the primary method of payment. There may never come a day when cash becomes fully obsolete, in developing markets especially. However there has been a surge of alternative payment methods in the last decade, particularly mobile payments. Juniper Research reported that developing countries, where an effort is being made to build up mobile-friendly transactions, are showing a rise in mobile payments. Many mobile remittance providers in these areas have also been proving to achieve great levels of success.
Juniper reported that of 15.2 million consumers using Kenya’s Safaricom in September 2012, 79 percent of those users employed the M-Pesa money transfer service. At the same time, $570 million (KES80 billion) was the amount being transferred by Safaricom users per month. Highlighting the significance of this sum, is the fact that this number is equivalent to 31 percent of Kenya’s GDP, and 18 percent of Safraicom’s total revenues.
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The M-Pesa service has been launched in neighboring country, Tanzania, with 4.4 million registered users, and up to $21.5 million (TZS35 billion) in transactions everyday. M-Pesa has inspired several companies to take the same route and have started to deploy similar services in areas across sub-Saharan Africa, developing parts of Asia and parts of India. Consumers in these developing areas are keen on mobile payment services as they reduce risk of cash robberies between financial agents and it is also saving them time. Bringing innovation and new payment opportunities to the 2.5 billion unbanked and three billion under banked around the world is beneficial to both the consumers and service providers.
For more reports from Juniper, click here.
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