NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, February 6, 2015

In emerging markets, mobile money services have the power to simplify lives, offering people the convenience of paying from anywhere and at any time, but also to transform them, playing a social noble role by addressing the unbanked or underserved population in Africa, offering them payment services they did not have access to before.

Africa is a continent filled with digital opportunity. With the mobile phone as the primary online device and a 72% mobile phone penetration rate, by far surpassing landline internet connections, the African digital revolution will take place through the small screen. Seven out of 10 of the world’s fastest-growing economies will be in Africa by 2015. And the continent’s financial services sector is projected to grow 40% by 2020.

However, it is also a place where a vast number of people do not have access to an account at the bank. 80% of sub-Saharan Africa is unbanked.

But there are a number of initiatives that are helping people in sub-Saharan Africa gain financial access. And these latest advances in technology are leading to the convergence of banking and telecoms.

Prepaid cards, where a set amount of money is loaded onto a card not linked to a bank account, are now obtainable from banks, mobile network operators and retailers. Easy to use and widely accepted, prepaid cards enable a safe and convenient method of storing money, and the prepaid trend will be boosted by the growing roll out of contactless card technology.