By Chanel Smith (@PYMNTS_EMEA)
In the last three years, remittances through mobile money services have blossomed in both developed and developing markets around the world.
Today, there are nearly 150 million global mobile money transfer users: a figure predicted by Juniper Research to grow to 400 million by 2018. These innovative financial services have grown so quickly largely due to the fact that a strong mobile infrastructure already existed and because of the affordability of such transactions.
A recent study from Juniper Research discusses which types of consumers are fueling mobile money transfer growth and where the most frequent users reside. Additionally, PYMNTS.com finds out which key factors will drive future expansion and which factors may threaten the market.
Mobile Money Users
According to Juniper Research, there are two types of consumers who are remitters: international remitters and domestic remitters. International remitters are predominantly sending money from a developed market to a developing market overseas, whereas domestic remitters are largely sending money intra-nationally (generally from urban to rural) within a developing market.
At present, the global total of remitters—a figure that calculates international and domestic users—stands just under 150 million. As previously mentioned, mobile money transfer users are estimated to increase to nearly 400 million by 2018.
Most Frequent Users
The study indicates that the two largest regions with the highest number of mobile money transfer users are the Far East & China, and Africa & The Middle East. Other key research shows that developed regions, namely North America and Western Europe, have much higher proportions of consumers who are categorized as international remitters, as opposed to domestic. However, these two regions still only represent a minority of overall global mobile money transfer users.
Growth Drivers And Roadblocks
Juniper’s report highlights that a key driver for market growth will be the deployment of domestic money transfer services. Additionally, such services should be backed by multinational network operators that continue to expand their product portfolio. New products should meet group-wide consumer needs, rather than releasing products that only satisfy a specific segment or purpose.
Juniper indicates that as the market matures, money transfer services can incorporate more sophisticated services, including savings accounts, lending programs and even insurance. As the market expands and services encompass greater breadth, the number of users is expected to increase. The study explains that these services have the power to strengthen financial inclusion, as well as improve the quality of life across rural communities in developing markets.
Conversely, the report also identifies areas of conflict that could potentially slow mobile money transfer adoption. Analysts caution against government officials who are imposing taxes on mobile money service in countries such as 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,” Dr Windsor Holden, report author at Juniper Research, said. “The introduction of a similar 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.”
To read the full report at Juniper Research click here.
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