Profitability 2.0: Ecosystem-driven business modelling and the future of mobile money margins
The past decade has seen mobile money providers worldwide achieve profitability at scale, enabling them to continue investing in and expanding their services to the ‘last mile’, and reaching financially excluded populations. In some instances, this has also helped them improve their product offering to meet their customers’ evolving demands.
Profitability has mainly been achieved through high uptake and growing fee-generating transaction volumes/values. Indeed, over 1.2 billion mobile money accounts now exist globally, and the industry as a whole is processing more than $2 billion per day.
However, key trends indicate that this prevailing transactional make-up is increasingly vulnerable to disruption. For mobile money providers to remain profitable and maintain a competitive advantage, they must expand their business models beyond transactional fees, paving the way for a transition to a ‘payments as a platform model’ – a strategic shift whereby more value remains digital while revenue sources are increasingly diversified.
Building on previous GSMA outputs on mobile money profitability and new research, this report, created by BFA Global and GSMA Mobile for Development, makes a case for a three-tier pro forma business model – including key recommendations on opportunities and risk mitigation.
Ecosystem-driven business modelling and the future of mobile money margins