COVID-19: Current Status and the Future of Mobile Money Services Across Africa
Mobile money services on the African continent have not only been a great business success story but also a significant social success, as mobile money offers an opportunity to promote greater financial inclusion and stimulate economic growth.
Customers in the Vodacom International markets, including Safaricom, now process more than US$14.7 billion in monthly transactions through the M-Pesa platform. 40 million customers transact through M-Pesa across all Vodacom’s operations, growing at 22% per annum.
Although M-Pesa activity in the short term in some of our markets has been impacted by extended lockdown periods, Vodacom believes that in the longer term, the Coronavirus pandemic could prove to be a catalyst for the increased uptake of mobile money services. The World Health Organisation recently cautioned that cash could contribute towards the transmission of the virus. With ongoing uncertainty around how long it will take to find a vaccine, cashless and contactless mobile money services offer a safer way to conduct business transactions, protecting consumers and merchants alike.
Some countries are actively promoting the use of mobile money services over cash, such as in Vodacom International Business markets Mozambique, the DRC, Lesotho and Ghana, where certain tariff reductions on M-Pesa transactions have been implemented. Together with the Kenyan Central Bank, Safaricom has also implemented a fee-waiver incentive on M-Pesa transactions to encourage consumers to move away from the physical exchange of currency.
Almost all industries have been affected in one way or another by the pandemic. Varying levels of lockdowns implemented and regulations set by governments have restricted the movement of people, reduced trade or temporarily stopped business completely. Cash transactions have reduced in volume, and mobile money transactions are no different. There is however still an inflow and outflow of cash when users make a deposit or withdrawal, which requires frontline M-Pesa agents to complete each transaction.
Depending on each market and the types of lockdown restrictions that are in place, a number of measures have been implemented to ensure the safety of all M-Pesa agents. In Mozambique, Vodacom is assisting 30,000 frontline agents with 25 litre water tanks to ensure that cleanly and hygienic cash transactions are maintained. In Lesotho and Kenya, Vodacom has also contributed funds for agents to acquire cleaning products such as hand sanitizer, soap and other protective equipment. Educational content has been provided on how to ensure a safe and hygienic work environment.
As the pandemic continues, mobile money services are likely to have an even bigger role to play across the continent. Post lockdown there will be a ‘new normal’ way of life. The benefits of mobile financial services will become increasingly clearer, as people and businesses adapt to a brave new world.
By Diego Gutierrez, Vodacom International Business Chief Officer.
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