Hugo Cuevas-Mohr puts together every year the 10 Most important Issues for the industry. To download the PDF go to Download/IMTC Publications.

Mobile Money Services continue to expand across the developing world with new cross-border functionalities, systems integrations, partnerships, and regulatory advances for the industry. Domestic use of mobile transfer services spreads. The Global Mobile Systems Association (GMSA) reports that mobile money industry continues to expand globally, with more than 250 live mobile money services in nearly 90 countries.

There are 263 live deployments and 101 planned deployments now. See chart. Also, more than 20 deployments have at least 1M active mobile money customers and, in 16 markets, there are more mobile money accounts than bank accounts. Mobile money usage continues to be dominated by domestic person-to-person (P2P) transfers and airtime top-ups.

Mobile money providers are moving into international remittances at a fast pace, working on interoperability while companies are providing interconnection bridges or hubs between MTOs and mobile money operators, such as Mastercard’s Homesend and TransferTo.

In the sending markets, online money transfer companies are connecting with mobile money service providers and, although traditional MTOs are also increasing the provision of such services, their technical limitations might make difficult their expansion into this distribution channel. New remittance models in West Africa and in Latin America (Tigo in Paraguay and El Salvador) will undoubtedly make mobile money remittance services (MMRS) grow and expand. News of MMRS topped the most influential posts in NextBillion’s Financial Innovation contest.

In the Mobile Payment Transaction Market: Global Industry Analysis and Opportunity Assessment 2014 – 2020 published by Future Market Insight (FMI) they state: “Mobile payments market was valued at US$ 392 billion in 2014, and is expected to reach US $ 2849 billion by 2020. Growing at a CAGR of 39.2% over the forecast period. The growth of mobile payment market is mainly attributed to the growing ubiquity of mobile phones and their increasing features replacing the physical wallet. Additionally consumers are increasingly getting comfortable with using their smartphones for applications other than voice.” If those numbers don’t make industry colleagues realize where the market going, I don’t know what will.

A report from Juniper Research published in July 2015 has found “that the number of mobile money transfers is expected to increase by nearly 150% in 2015 to more than 13bn, with several social media firms already seeing a dramatic rise in service usage.” US social payment service Venmo is doing nearly $1 billion per quarter and during February 2015 WeChat users in China did 3.3 billion P2P transactions in just 6 days over the Chinese New Year period on ‘red envelope’ P2P gifting. That number will probably double in 2016.

One brilliant report that that everyone in the IMT&Ps industry needs to read also highlights the importance of the clash between Telcos & Banks for the Mobile Transfer market. The report is entitled “Mobile payments in emerging markets: Where two dogs fight for a bone…” published in October 2015 by ROBECO. A great quote from the report says: ” The real battle in emerging markets is between Mobile network operators (MNOs), financial institutions (mostly banks) and third party service providers (fintech). Although cooperation would be a better alternative, the incentives to offer mobile money services are often too different in order to find common ground.”

The table in page 11 of the ROBECO Report with the most likely leader of mobile payments (MNOS, Banks, Fintech) in selected emerging markets is worth analyzing. This report is intended for investors and a subtitle in page 2 is direct: Avoid incumbents offering remittance services and banks underinvesting in technology.

We highlighted the clash between Banks & Telcos in our 2014 publication MTOs, Telcos, Banks: On A Collision Course Over Remittances?

Continue reading The 10 Most Important Issues of the International Money Transfer & Payments Industry for 2015 in this Blog or  To download the PDF go to Download/IMTC Publications.