Mobile money accounts are growing in numbers but a large proportion of them remain dormant. More must be done to integrate the e-wallet model with conventional payment systems.

The number of registered mobile money accounts has risen by 31%, to 411 million, in the past year, according to the Groupe Spéciale Mobile Association’s (GSMA's) 2015 state-of-the-industry report.

Yet despite this groundswell in numbers – mainly as a result of financial inclusion programmes – many mobile accounts lie dormant. GSMA research shows that just under one-third (134 million) of accounts were active in December 2015.

Many experts believe the problem stems from the lack of a real-life value proposition for end consumers. Fundamentally, in most countries the reason for use has not matured beyond a ‘cash in/cash out’ model, where people immediately convert what they have in their electronic wallets to cash.

The lack of mobile money integration with domestic payment and financial systems is a challenge, and limits the reasons to use mobile money. Mobile money acceptance must become more entrenched in daily life – so that people become accustomed to paying for their groceries and utility bills, as well as receiving income, digitally. Meanwhile, companies need to be able to pay employees’ salaries into mobile wallets.

In addition, much has still to be done in providing end clients with the appropriate products and services for them to transfer their current informal financial activities in cash into the formal sector.

Even where second-generation products – such as savings, credit and insurance – are offered, they may not resonate with end users that historically have been financially excluded, many of whom are living on less than $2 a day.

Microloans and microleasing are two products that are successfully promoting greater mobile money usage. For example, in Kenya, M-Shwari allows Safaricom users to access $10 to $30 loans through their mobile phone.

In addition, Off.Grid:Electric, an African company that leases out residential solar units, uses the mobile money infrastructure to collect a multitude of tiny daily digital payments from customers, which would be too expensive with cash.

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