Mobile money is king in Africa and its impressive growth is making telcos in the continent consider running their mobile money services independent of their parent companies.
There’s a good reason for this.
The number of registered mobile money accounts grew by 12.7% globally in 2021 to 1.21 billion accounts – double the forecasted growth rate and Sub-Saharan Africa makes up the biggest slice of this pie on all fronts – the number of accounts (548 million of the 1.2 billion accounts), transaction volume (27.4 billion of the 41.4 billion transactions), and transaction value ($490 billion of the $767 billion worldwide).
Leading telco Safaricom has been teasing spinning off M-Pesa as a stand-alone payments service since 2017 but hasn’t gone through with the plans yet.
Airtel, its rival has already begun the spin-off process. Airtel Money will soon be run as a separate entity from Airtel Africa.
Vimal Kumar, Airtel Money CEO said that they had started the process 18 months ago to run the mobile service as a separate entity which included getting regulatory approval and establishing a relationship with the GSM business.
Speaking to Quartz[Account needed to read], Vimal said that the process has been long and that about 75% is its operating companies are on a standalone license.
“We are anticipating at least by end of this year, we should be able to establish a standalone entity,” adds Vimal in the interview.
Airtel Money business now has a valuation of about $2.65 billion.
The mobile money service will continue operating in the 14 countries they have licenses to operate in but will expand to more markets once they get regulatory approval.
The main challenge according to Vimal is that the continent doesn’t have uniform documentation such as National IDs that hinder Airtel Money’s ability to onboard more customers.
Vimal adds that COVID-19 has made regulators recognize the importance of mobile money in pushing social grants and encouraging customers to switch to digital and increasing mobile money transaction limits.
COVID-19 HAS TRIGGERED A WIDESPREAD SHIFT IN THE ADOPTION OF MOBILE MONEY SERVICES, WITH THE GSMA REPORTING A 12.7% INCREASE IN THE NUMBER OF REGISTERED GLOBAL MOBILE MONEY ACCOUNTS IN 2020.Airtel
He shared his concern about taxing mobile money in countries like Tanzania and Uganda with the imposed taxes.
Vimal shared the interest in all-in-one super apps that customers use for all their financial transactions.
He sees future opportunities for Airtel Money in crypto, blockchain and central bank digital currencies once proper regulations are set.
Cybercrime and fraud are risks that face the mobile money business Vimal is worried about. Talent is another thing.
“How do we nurture talent, how do we grow talent, and retain them?” he says.
“I think I’m in this company at the right time. All engines are firing. There’s so much of excitement, the future is digital payments. We are really right in the middle of it, and we’re growing this business nicely with exceptional returns,” he continues.
Airtel Money recently partnered up with Flutterwave, an African payments platform to see its money services expand across Eastern Africa.
The collaboration sets to empower businesses in Uganda, Tanzania, Zambia, Malawi, Kenya, and Rwanda, to receive payments from Airtel Money customers if they have integrated Flutterwave in their systems.
The integration will also allow businesses to make bulk payments into Airtel Money wallets.
Airtel Money also partnered with World Remit to allow Airtel customers to receive money from 129 countries, free of charge.
Through this partnership, Airtel Money customers will be able to receive funds directly into their wallets and transact through sending or withdrawing money, paying bills or using the Lipa na Airtel Money options.