App, Business, Ecommerce, Finance, Marketing
Reading Time: 4 minutes

Mobile Money Revolution: Transforming Payments in Africa

The limitations of the traditional banking infrastructure in Africa gave rise to the development of mobile money, a transformative technology that has revolutionized how people access and transfer money worldwide.

Mobile money is a digital payment system that allows people to send and receive money, save, invest, and carry out other financial activities with their mobile phones instead of using a regular bank account.

The mobile money revolution has completely changed how payments are made, altering the economic and social dynamics of the continent in the process. This article discusses the mobile money revolution in Africa and how it’s transforming payments for individuals and businesses.

History of Mobile Money in Africa

Mobile money was introduced in Africa to expand access to financial services in underserved environments. It started with Safaricom’s launch of M-Pesa in Kenya in 2007, which had instant success as it recorded over 13.5 million subscribers in 3 years and 8 months after launch.

The success of M-Pesa in Kenya resulted in its adoption in other African countries such as Tanzania, the DR Congo, Egypt, Ghana, Lesotho, and Mozambique.

Furthermore, the success of M-Pesa led other telecommunication operators to create their own mobile money services. MTN came up with MTN Mobile Money (MTN MoMo), Orange developed Orange Money, and Airtel came up with Airtel Money.

The Effect of Mobile Money Revolution on Payments in Africa (How mobile money is transforming payments in Africa)

Mobile money is transforming payments in many ways in Africa. Here are some ways it is doing so:

  • Financial Inclusion

Mobile money has greatly increased financial inclusion in Africa, providing financial service access to many people in areas initially excluded from the financial system. This means more people can save, transfer, receive, take loans, and access other financial services and products in Africa.

A Global Findex Database report shows that account ownership in Sub-Saharan Africa increased from 43% in 2017 to 55% in 2021. An increase in financial inclusion improves payments, empowering businesses as more people are able to access financial services.

  • Accessibility

Mobile money services are accessible to a vast majority of Africans, as more people and businesses can now make payments, save money, invest, and access other financial services even from their remote locations.

A key reason for this is Africa’s high mobile phone penetration rate. According to Statista, mobile penetration in Africa was 46% by 2021 and is expected to rise above 50% by 2025. What this means for individuals and businesses is that people can carry out many financial transactions with their phones, reducing the need for physical bank branches or ATMs.

  • Cashless Transactions

Although 90% of African transactions are still cash-based, a McKinsey survey shows cash supremacy in the continent is likely to be challenged in the coming years as digital payments gain momentum.

Mobile money has greatly increased the rate of cashless transactions in Africa. As more people access mobile money services, their need for cash reduces as they can pay for goods and services, bills, and even government services using their mobile phones.

Furthermore, increased cashless transactions reduce the cost and risks associated with cash.

  • Reduced Transaction Costs

Reducing transaction costs is another effect of mobile money services on the African payment system. The fees and transportation costs (for those in remote areas who need to travel to access banking services) associated with traditional banking can be expensive, reducing people’s purchasing power.

Mobile money services are cheaper than traditional banking services, especially when you consider that banks charge fees for card maintenance, ATM transactions, taxes, and more.

Therefore, businesses benefit greatly from mobile money transactions as they save costs from reduced transaction fees.

  • Merchant Payments

Small and informal businesses are among the major beneficiaries of the mobile money revolution in Africa. It has empowered them to attract more customers and facilitate higher transaction volumes.

By accepting digital payments, businesses expand their payment options, enabling customers who can only pay with mobile money to purchase from them.

Furthermore, mobile money enables businesses to not limit their services to on-site customers. They can accept mobile money payments remotely, enabling customers to patronize them from anywhere at any time. This particularly benefits service providers, online businesses, and delivery businesses.

  • Remittances

The impact of the mobile money revolution on remittances in Africa has been tremendous. Mobile money has made it easier for Africans in other countries to send and receive money from their families and friends without battling the stressful bureaucracies the processes were initially laden with.

Remittances have not only become easier and faster but also cheaper. According to the World Bank’s Remittance Prices Survey, the average cost of sending $200 in international remittances with mobile money in Q4 2022 was 4.5%, less than the global average of 6.2%. Compared to other remittance channels like bank transfers (11.8%), post offices (6.3%), and money transfer operators (5.4%), mobile operators offered the cheapest cost of remittance.

The ease, cost, and safety of remittance transactions with mobile money have made it a suitable channel for cross-border, low-value business transactions. Businesses can effectively carry out low-value transactions without incurring the extra costs of other remittance channels.

  • Rural Development

Beyond transforming payments for individuals and businesses in Africa, the mobile money revolution greatly influences rural development in many parts of Africa.

It has connected previously isolated communities to the broader economy, allowing individuals and businesses to improve their financial state. For example, small business owners in rural communities, such as farmers, traders, and craftsmen, can access loans, sell their products to customers in other locations, and participate in other economic activities previously inaccessible to them due to lack of access to financial services.

  • Fintech Innovation

The success of mobile money in Africa has led to significant innovations in the fintech sector as companies tailor their solutions to accommodate mobile money users.

Companies are developing financial solutions that allow mobile money users to participate actively in the financial system. Mobile money users can save, borrow, and invest with their mobile phones without having an official bank account.


The mobile money revolution has greatly transformed payments in Africa, improving financial accessibility, convenience, and inclusion. It has generally empowered individuals, businesses, and governments, leading to massive economic developments.

Hopefully, this article has given you insights on the mobile money revolution in Africa and how you can benefit from it as an individual or a business.


Leave a Reply

Your email address will not be published. Required fields are marked *