XM -Blog

Africa – A Future Backed By Mobile Wallets

November 22nd, 2019

Have you ever tried to imagine life without mobile phones? Looking at our increasing dependence on this device, today, it is hard to envision a world without mobile phones. They are an indispensable part of our everyday life.

Over the past few years, the mobile phone has travelled far beyond its initial purpose as a tool for communication and entered a multidimensional realm of providing information and convenience. Whether you walk to the local market to pick up groceries or hop across town to visit a friend or travel abroad on work, you are just a phone call away from your loved ones.

Over the years the mobile phone has evolved dramatically. From being used only to make calls and send text messages, it has now transformed into a gaming device, a camera and a wallet. All these features have been very welcome, but it’s the advent of the mobile wallet that has changed the rules of the game within the financial service sector.

Mobile wallets enable people to pay for utilities, shop online, and access a host of other financial products on the go. The mobile wallet revolution is changing the way people deal with money, and Africa – the birthplace of this revolution – is an excellent example.

It was 12 years ago that the concept of mobile wallets gained public attention in Kenya.
M-Pesa changed the country’s (and eventually the continent’s) view of money forever. Originally designed to allow repayment of microfinance loans, mobile money wallets have proven successful in introducing a new way of managing money.

Today, across Africa, mobile wallets have become the norm. Sub-Saharan Africa sees the most number of mobile money transactions – 45.6% of the world’s total, to be precise. In a short period, mobile wallets in Africa have become the preferred choice to make a host of payments. Here’s why:


Mobiles phones were invented to add convenience to everyday life. Mobile wallets in Africa and around the world also work on the same principle. Reports indicate that there were around 747 million SIM connections in sub-Saharan Africa alone, towards the end of 2017. There can be no doubt that the concept of mobile payments in Africa is here to stay for the long haul.

Although these numbers can be a bit misleading (many people own multiple SIM connections), the impact of mobile phones in the region is significant. Even those who don’t own a mobile phone admit to using or borrowing someone else’s. More importantly, mobile wallets have many uses beyond just sending/receiving money. Today people rely on mobile payments in Africa to pay electricity or water bills, mobile bills, etc. to eliminate the time and effort required for traditional methods of bill payment.

From an industry perspective mobile wallets in Africa have added significant value to the world of cross border remittances. Expats can send money to their families back home, within minutes, via these wallets. What’s more, the recipients are not required to maintain a bank account or involve a cash agent to receive these remittances.

Africa reigns as one of the most expensive regions to send money to. For international remittances, many African expatriates who used dubious and often unsafe ways to send money in the past are now opting for mobile wallets as the preferred mode of money transfer. Mobile wallets simplify the process of sending and receiving remittances by being both quicker and more efficient.

Financial inclusion

Banking in Africa is faced by various challenges like lack of financial education and infrastructure. Even today, some parts of the continent are still developing their banking infrastructure. Nonetheless, despite this low rate of financial inclusion, mobile penetration in Africa is relatively high.

Mobile wallets help bridge the gap between the underutilised traditional financial services and a large number of people who continue to be unbanked. Mobile service operators in Africa understand the potential of this tool and are aggressively working on launching innovative financial services via mobile for their customers.

Apart from focusing on remittance, these providers are also collaborating with financial service institutions to offer services like credit, insurance, and savings accounts. For example, Tigo, a Ghanaian mobile service provider, gained immense popularity for providing its customers with a free insurance policy.


Mobile wallets in Africa offer greater transparency. Customers can easily track their transactions, keep a digital record of their payments, and raise requests for refunds if required. Even in the case of remittances, there are no intermediaries or cash agents, which is a relief for both senders and receivers.

The challenges

Although known for its convenience, mobile wallets in Africa still face some challenges. The older generation, as in other parts of the world, are technology-averse and prefer to stick to traditional methods of handling their money. Further, not all institutions accept utility bill payment via mobile payments in Africa. Mobile wallets have also received opposition from banks and mobile operators. Moreover, there is always a lingering threat attached to losing your phone and compromising your wallet’s security as a result. Despite the above challenges, the mobile wallet industry is growing.

To sum up

Africa and Asia are the two largest continents in the world, and it is clear that the future of the global economy is highly dependent on them. Even when traditional banks fail to reach the ordinary citizen, mobile wallets in Africa have a unique place for themselves in the lives of the people.

Mobile wallets can function efficiently despite international borders and physical limitations. With an increasing dependence on technology and the popularity of innovative mobile inventions, the future of mobile payments in Africa and around the world looks nothing short of promising.