Fact checking the future: The trajectory of mobile money in an unpredictable world

  • By Vince Kadar
  • Thursday, November 05, 2020

Like most CEOs, I’m used to taking in data and using it to build an informed picture of the future. That’s how I give advice to our clients, and it’s how I plan the way forward for Telepin. Early in 2020, my team and I wrote down some of those predictions and included them in our new eBook for mobile money business leaders

But as 2020 developed, the data I rely on grew more complex and volatile. The sheer scale and speed of the COVID-19 pandemic and its impacts, both economic and humanitarian, have demonstrated how quickly our world can veer from one version of the future to another, and how even the most educated predictions contain a wildcard factor that is, in its nature, difficult to account for. 

With that in mind, I’d like to revisit a few of the predictions that we included in our eBook, with the goal of sorting out how these last ten months have impacted mobile money operations around the world. 

We predicted that mobile money would accelerate in three particular ways:

Into areas with a high concentration of unbanked adults.

  • When the year began, we expected that regions with the highest rates of financial exclusion would see a significant increase in mobile money adoption. As we’ve now seen, the pandemic incentivized mobile money adoption around the world. Many businesses now require cashless transactions; for individuals with little or no access to credit cards or other touchless forms of payment, mobile money is often the only alternative.
  • This has accelerated the trend towards adoption already underway in unbanked areas of the world. In Nigeria, for example, mobile money transactions have risen by 14.5% since the pandemic began

Into areas of unrest.

  • Even before this pandemic spread around the globe, data showed that mobile money was an effective vehicle for delivering relief to those facing financial insecurity as the result of a large-scale crisis, such as forced displacement or the outbreak of a disease.
  • The direct and indirect effects of this global pandemic demonstrate the truth of that data. In sub-Saharan Africa, for example, 80% of government measures rely on monetary transfers to support those affected by the pandemic, which has motivated many countries to strengthen their mobile money ecosystems.

Into the hands of more women.

  • Women around the world are 10% less likely than men to own a bank account, and yet are often the key beneficiaries of cross-border remittance payments and government assistance. Improving women’s access to mobile money would free them from the risk and expense of relying on cash-based systems, and would help to equalize the gender gap that has long persisted in financial access. 

The pandemic only makes this need more urgent. We know that women have taken a harder financial hit than men as a result of COVID-19. We need innovative solutions designed to bridge that gender gap and connect more women to basic financial services. How has that played out during the pandemic? 

The results are mixed. In Pakistan, for example, the government acted quickly to harness mobile technology as a means of delivering financial support to its citizens. The trouble is that their system requires individuals to have both a national ID and access to a mobile phonea requirement that puts women at a steep disadvantage in a country where less than 30% of women in poverty own a mobile phone (compared with more than 70% of men), and many don’t own a national ID. 

For this prediction to bear out, we need more than just the right technology. We need new and improved systems and policies designed to remove the barriers that prevent women from participating in mobile money initiatives. 

In a changeable future, we all need adaptable solutions. 

This challenging year has left us with two critical lessons. 

The first is a reminder of how little we control. The second is a response to the first: we may not be able to control the future or see it with pixel-perfect clarity, but we can be ready for it by designing flexibility and resilience into tomorrow’s technology. 

That’s where mobile money shines. By its very nature, it’s a solution built to thrive in areas where other solutions fail or cannot reach. We may not know the future, but we know that solutions like this one will be an essential part of it.