In today’s world, a mobile device is like holding the world in the palm of your hand. It serves as a gateway to life-enriching experiences, such as capturing moments with family and connecting with friends. It also means we can find information, share opinions, buy items and pay bills easily. In short, this digital and mobile era has opened up huge potential for financial outreach.
According to the GSMA, two-thirds of the population use a mobile phone – which is the equivalent of 5.2 billion individuals worldwide. Even though there has been a slowdown of growth in the more developed regions, the Middle East & North Africa (MENA) region is expected to see the fastest subscriber growth rate globally after Sub-Saharan Africa, growing to 459M unique mobile subscribers and up from 318M in 2018.
This massive mobile user growth has resulted in the accelerated adoption of financial services without needing to have a bank account. In the Middle East and Africa (MEA) there are over 445 million mobile money wallets versus 286 million bank accounts.
Mobile has paved the way for a revolution in digital payments
MEA is a very diverse and dynamic region across most industry sectors and verticals, with significant variation in mobile phone usage across the region’s countries. The more advanced GCC countries boast a subscriber penetration rate of more than 77%. T
It’s no surprise that policymakers in both developed and developing MENA countries are getting involved in providing the necessary regulatory framework and infrastructure required to support the growth of digital finance in the region. The central banks of Egypt, Bahrain, UAE, KSA, Jordan and Pakistan have adopted specific initiatives to deregulate digital payment services.
Telecommunication companies, digital service providers and electronic retailers – giants that are not traditional financial service providers – are increasingly looking to diversify their business models by offering financial services. According to the GSMA, mobile money providers that offer savings, credit or insurance products have on average 24% higher revenue per user and 19% higher activity rates than those that don’t.
Consumer needs are also changing, and consumers don’t want to be treated as numbers
Given the new wave of mobile users will be a mobile-only generation, consumers increasingly expect access to a comprehensive suite of digital/mobile financial products and services, powered and delivered by the personalised consumer experience and user interfaces via mobile only.
While person-to-person, bill payments and cash withdrawals represent the most common uses for digital financial services today, consumers are demanding more benefits, such as secure access to a global online marketplace, easy and affordable access to credit facilities, or working capital in the case of small businesses.
The non-traditional financial service providers are investing to understand these evolving consumer needs by offering a full range of digital financial services to their customer base.
But taking advantage of opportunity is sometimes easier said than done
As non-traditional financial service providers look to scale and differentiate at speed, they are challenged by the fragmented barriers that currently exist i.e. the legacy infrastructure, integrating with multiple FinTechs and delivering a superior consumer experience. They are often required to procure and manage multiple third-party fintech partnerships across each element of the digital commerce ecosystem, the end result could be a disjointed consumer experience.
However, as Wayne Dyer said “If you change the way you look at things, the things you look at change”
With an impressive base of consumers, merchants and agents, these companies represent the movers and shakers in the digital payments industry, some examples include Telecommunication Operators, Digital Merchants and Payment Facilitators and Fintechs.
They are fueling the unprecedented growth currently being seen in the digital financial services space. In the region, this transformation of mobile financial services can already be seen through products such as Careem Pay in the UAE.
A key ingredient to the success of these companies lies in their ability to offer innovative solutions to their customers in the most efficient and consumer-centric way.
Amnah Ajmal is the Executive Vice President, Market Development, Middle East and Africa at Mastercard