PaaP adoption to fuel mobile money market growth
- The total value of mobile money transactions in emerging markets will reach $2.1tn by 2027, according to a new forecast from Juniper Research
- That is a 33% increase compared with the expected market value in 2023
- The adoption of payments-as-a-platform models is fuelling that growth
The value of mobile money transactions in emerging markets is set to increase by 33%, or $500bn, over the next four years to reach $2.1tn in 2027, according to a report from Juniper Research, which believes the adoption of payments-as-a-platform (PaaP) models will drive that growth.
The PaaP approach enables third-party service providers to offer their products and services via mobile money apps. This delivers new revenue streams to mobile money operators and helps them more easily meet the “increasingly sophisticated” needs of their customers, according to the Juniper Research team.
The report, Mobile Money in Emerging Markets: Trends, Strategies and Market Forecasts 2023-2027, found that the use of such platforms will also attract a growing number of mobile financial services (MFS) users in emerging markets, with the total number of users expected to grow by about 40% over the next four years to 411 million. That growth “is a result of providers offering a variety of services, such as microloans and microinsurance, to satisfy growing user demand,” noted the firm, adding that for service providers to benefit from this demand, they need to invest in the technologies that enable them.
“Vendors must implement sophisticated MFS in an effective way, or they will lose ground to rising competition,” explained report co-author Cara Malone. “This can be best achieved through new approaches, such as leveraging existing data that operators hold to enable alternative credit scoring, allowing much greater lending opportunities,” she added.
Mobile money service providers need to “leverage data analytics to best retain customers and fight off rising competition,” noted the Juniper Research team. “By gaining valuable insight into consumer behaviour and preferences, vendors can provide better-tailored services to end users. Combining this data with new third-party services via PaaP enables a more personalised service,” which will boost customer satisfaction and revenues, it added.
- Ray Le Maistre, Editorial Director, TelecomTV