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More than a decade ago, Kenya revolutionized the world of digital payments and financial services through the invention of M-Pesa. 12 years later, it’s time to think beyond mobile money to how consumer behaviour is redefining digital payment solutions.

In an interview with Financial Times this April, Cellulant Co-Founder & Co-CEO Ken Njoroge spoke of mobile money as being just a first step towards the potential of digital payments to solve bigger economic problems. Despite its huge impact across different market segments, consumers have become increasingly mobile and connected signaling the limitations of mobile money in continuing to offer the convenience that is commensurate to our now fast-paced connected and mobile lives.

 A rise in Uptake of Mobile Money

Over 66% of adults in Sub-saharan Africa having no traditional bank accounts according to the World Bank. The impact and role of mobile money in bridging this gap continues to grow as more governments ease the heavy regulation against mobile operators and payment gateway providers such as Cellulant to provide financial services to this unbanked population.

There are now 500 million Africans who currently use mobile phones. According to GSMA’s 2016 annual report, that number will rise to 725 million by 2020. Mobile money is now active in 31 countries in Africa with 84 million active mobile money accounts.

Mobile money transactions in sub-Saharan Africa could exceed $1.3 billion by 2019 according to data by the consulting firm Frost & Sullivan. According to Africa Renewal, experts forecast that the increasing number of mobile subscribers will inevitably lead to an increase in the mobile money market.

Nowadays, millennials and GenZ living in urban cities whether in Africa or across the globe cannot fathom the concept of queuing for financial services

Millennials and GenZ living in urban cities whether in Africa or across the globe cannot fathom the concept of queuing for financial services

When mobile money needs were simple

The rapid rise of mobile money has revolutionized the financial services industry disrupting not only the banking model but also our relationship with cash in payment for goods and services. Mobile money’s appeal and quick adoption, initially in Kenya and now, in over 30 African countries, has largely been due to its ability to simplify the arduous payment process that consumers had to endure for simple things like buying airtime, sending or receiving money or even paying for utility bills.

With those problems now solved, the consumer’s vision of what mobile money ought to do for them to solve bigger payment problems has since grown bolder in tandem with their online experiences muscle.

Although the convenience has been great, mobile money’s overall impact on the daily lives of Kenyans and even Africans and the country’s economy in overall is still sparse as Tom Wilson notes in his article.

Consumers want more convenience

A decade ago, utility services such as water, electricity, rent, or even airtime were delivered and paid for offline with little digitization to processes such as payment. That slowly started changing as mobile money brought a convenience many had never before imagined. With mobile money, one no longer had to queue in numerous branches every end of the month to pay all their household bills which would sometimes take a whole day or two if complications arose.

Nowadays, millennials and GenZ (those born after 1981) living in urban cities whether in Africa or across the globe cannot fathom the idea of queuing for financial services or any other service for that matter. That concept is too foreign for their super connected, app consumed and social media incubated world.

The urban consumer segments in Africa is now largely made up of the millennial working class who, having grown up with technology have had their digital appetite whipped for more convenience. Their growing demand for the ‘instant service’  that is available on their smartphone is now going beyond what individual mobile money operators are able to offer.  This is, on one part, due to the growing number of licensed mobile money operators in every country with challenging or no interoperability, and on the other part, a highly connected, mobile very demanding consumer segment that can be quite vocal on social media about their service delivery experience.

Thus the demand today for the simplicity of a seamless digital payment experience that integrates all possible payment methods for this consumer is greater now than it was 5 or so years ago.

The Urban consumers's demand for more convenience in digital payments is growing beyond what individual mobile money operators can offer

Urban consumers’ demand for more convenience in digital payments is growing beyond what individual mobile money operators can offer

From mobile money to digital/mobile wallets

Today’s urban consumer is at any one time, either paying for their PayTV subscription, shopping online, buying airtime for their twin sim phone, paying for their next holiday, having dinner at a restaurant or at a coffee shop or at home surfing. Payment has become part of our daily lives.

A mobile wallet is a way to carry your payment information in a secure digital form on your mobile device.  Digital wallets are often referred to as virtual stores of value as they have the power to go beyond mobile payments to evolve with the growing needs of the consumer. With a mobile wallet (a mobile version of a digital wallet) consumers can make payments and/or access a wider array of information services.

Mula and Tingg are a few examples of digital and mobile wallet services that bring together various digital payment operators allowing users to access various types of payment methods such as mobile money, mobile banking or debit/credit cards.

Digital wallets are becoming a new trend in digital payments.  Consumers can now, with just one app, use all the payment methods they have available to them based on where their money is (mobile money or card) as well as what payment options the merchant/service provider has given.

The writing on the wall from consumers is quite clear, there’s a need to think beyond mobile money when thinking payments.

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