Advanced mobile money services to fuel 80% growth in transaction value

A new survey from Ericsson and Juniper Research has led them to make a number of educated guesses about the future trajectory of the mobile financial services (MFS) market to 2028. Chief among them is the prediction that 40% of mobile subscribers will be using them by then, compared to 29% today.

Greater transaction value is expected to follow. Ericsson and Juniper reckon it will rocket by 80% over the forecast period. Rather than put a value on that though, they cited a different Juniper report from last summer that predicted digital wallet transaction value will reach $16 trillion by 2028.

Their survey also ranks the expected drivers of this meteoric growth, with 'advanced services' coming out on top.

Indeed, far from just sending and receiving money, customers are keen to use their mobiles for clever things like loans, insurance, arranged overdrafts and BNPL (buy now, pay later) short-term credit services.

Improved security and fraud detection are also expected to help with adoption, and so is targeting under-represented demographics, like rural populations, women, and teenagers.

On a geographic basis, Africa is expected to continue to account for the majority of MFS users – some 49% by 2028 – followed by Asia Pacific (37%) and the Middle East (30%).

Operators that can harness these drivers and capitalise on the growth can expect their MFS revenues to climb by as much as 45%over the next five years.

"What is striking is how massive the changes coming for mobile financial services are. MNOs we surveyed are expecting advanced services to be transformative, both for their service portfolios and for their revenue, and we expect this to have an enormous impact over the next five years," said Nick Maynard VP of fintech market research at Juniper Research.

"Mobile financial services are transformative for telcos, positioning them as digital innovators and unlocking invaluable new revenue streams. Integrating MFS enables telcos to anticipate consumer demands, adapt to market trends, and stay competitive," added Michael Wallis-Brown, head of mobile financial services at Ericsson.

A dose of MFS hype is in Ericsson's interest, of course. The Swedish kit maker sells a Wallet Platform that claims to offer everything an operator needs to launch their own portfolio of financial services. At the beginning of the year it expanded its partnership with South Africa-based MTN, which has made mobile fintech one of its strategic priorities.

To Ericsson's credit though, its Wallet Platform does not get a mention in the official press release until the notes for editors section, and it doesn't appear until page 51 of the survey with Juniper – there have been more brazen attempts to drum up business, put it that way.

And it takes nothing away from the growing significance of MFS, either.

Just last week, Bloomberg reported that Airtel Africa is considering an IPO of its Airtel Money business that could value the unit at up to $4 billion. According to the report (paywall), it is Airtel's fastest-growing division. In September it reported annualised transaction value of $116 billion.

In November, a report from McKinsey concluded that European mobile financial services providers are on track to grow annual revenues by €25 billion between now and the end of the decade.

So while surveys like Ericsson and Juniper’s are undeniably self-serving, it nonetheless shines a light on a lucrative sector that is all too easy to overlook when something new and shiny – like generative AI, for example – comes along.