Mobile devices Are Driving Financial Inclusion

Juniper Research has predicted that the use of mobile devices to make retail and store payments will act as a driver for financial inclusion of the unbanked in the world’s emerging markets.

In a new report, the company forecasts that mobile merchant transactions by unbanked individuals will grow from 1.8 billion per annum in 2018 to 3.8 billion by 2023.

The new research, Mobile Financial Services in Emerging Markets: Mobile Money, Loans, Savings & Insurance 2018-2023, praised mobile merchant payments as they make digital transactions accessible to a much broader segment of society .

The research recommends that players provide value added services such as microloans, analytical tools and advice for businesses – in addition to SMS-based marketing services – as a means to drive engagement.

Juniper cautions that tariff rates must remain low, citing the fact that Safaricom’s Lipa Na M-PESA was obliged to impose a 50% reduction in fees last year, both to address customer indifference and ward off competition.

The research singled out Mastercard as a key innovator in the sector. The company has launched a QR code-based solution with the aim of connecting 40 million micro and small merchants to its payments network by the end of 2020.

Lauren Foye explained: “Previously merchant payments relied upon SMS to facilitate transactions, with customers texting a code to initiate payment; thus the process was slow and inefficient. With QR code solutions, shoppers simply scan a merchant code to rapidly initiate the payment process.” – Telecom Asia