What Is Mobile Money and How It’s Transforming Africa’s Economy?

Mobile money is a digital payments service that turns any mobile phone—smartphone or basic feature phone—into a personal bank. By using simple USSD codes or mobile apps, millions of Africans can send and receive funds, pay bills, and save for the future without ever setting foot in a bank branch. Today, more people on the continent hold mobile money accounts than traditional bank accounts, driving over USD 912 billion in Sub-Saharan African transactions and contributing to a global total exceeding USD 1.1 trillion in remittances and payments. Beyond convenience, this technology is fostering financial inclusion, powering small businesses at roadside stalls, enabling safer school-fee transfers, and building economic resilience across urban and rural communities alike.

Let’s start with the money, because that’s what this is all about, right?

Between 2013 and 2022, mobile money pumped an extra $600 billion into the GDP of countries where it's widely used. It has done more than simply “making a dent.” It is breaking down the walls that historically excluded particular groups of people from access to financial tools. Mobile money's GDP contribution ranged from anywhere between USD 6 billion in Senegal to USD 24 billion in Kenya by the end of 2023.

All because people can now send money instantly, buy airtime without trekking miles, and access micro-loans with zero paperwork all through their mobile phones.

What does that look like in real life? It’s the moto driver in Rwanda who no longer carries wads of cash. The women in Kariakoo Market who can now accept payments digitally, and save their earnings. That’s GDP growth you can feel in real life.

Why did mobile money explode in Africa? Two words: young people.

With a median age of just 19.3, Africa isn’t just the youngest continent, it’s the most digitally adaptable. While some parts of the world are wondering why Gen Z won’t answer phone calls, African youth are here running businesses from WhatsApp and paying for groceries and tuition with MoMo.

African youth leapfrogged right over banks and went straight to the convinient and accessable option; mobile money.

The appetite for digital services is massive, and mobile money sits at the center of it. When 70% of Sub-Saharan Africa is under 30, that’s not just a trend, but a demographic time bomb, and it’s already going off in a good way (for the most part.)

Let’s talk tech, because at the end of the day mobile money is fintech. It runs on SIM cards, smartphones, and towers.

• Smartphone penetration is projected to reach 88% in 2030.
• Budget Android devices are flooding markets.
• 4G coverage is expanding, and 5G is creeping in where there’s money to be made.
  

But here’s the key point, mobile money also works on non-smartphones, using USSD codes. It doesn't require apps or data to use. That’s a uniquely African innovation: high-tech outcomes with low-tech tools. Just a basic phone and a short string of numbers, and boom, you’re sending money, paying bills, checking your balance and buying your babe flowers.

While East Africa leads on these feature-phone-friendly systems, West Africa is skipping straight to app-based platforms like PalmPay. For example, Kenya's M-Pesa now has about 34 million Kenyan users, while in Nigeria PalmPay alone has roughly 30 million app-based accounts. This could be attributed to the high rates of smartphone penetration on the continent. In Q1 of 2024 alone, about 20 million smartphones were shipped to Africa as compared to the roughly 18 million feature phones. So it is no wonder West African youth are swarming to the app-based mobile money services with flashy UIs and instant cash-back offers.

The infrastructure isn’t perfect yet but it’s good enough, and growing fast enough, to support a digital financial revolution across the continent.

You can’t talk mobile money without name-dropping M-Pesa. Kenya made it normal to send money with a text back in 2007, and the rest of the region followed closely.

In most of East Africa, mobile money is money. Cash is still used, but for many people, it’s less trusted than their phone balance.

Here’s what sets East Africa apart:

• Deep integration into daily life: utility bills, school fees, even funeral contributions.
• Government buy-in: tax payments, business licensing, traffic fines, all done via mobile wallets.
• Strong agent networks: you can cash in or out practically anywhere, from city malls to roadside stalls.

Uganda and Tanzania may not get as much international hype as Kenya, but their adoption rates are serious and still growing. Uganda has the highest adoption rate with mobile money transactions making up to 94% of the nation's GDP in 2024, followed by Tanzania, with 47% of the national GDP is transferred through mobile money.

If East Africa laid the groundwork, West Africa is scaling it fast and with a twist. This region is less dominated by telecoms and more open to non-MNO fintech players.

Enter:

• PalmPay and OPay in Nigeria, flooding the market with aggressive incentives.
• MTN MoMo expanding from telecom to super app status, now operational in 16 African countries.
• Wave in Senegal and Ivory Coast, slashing transaction fees to near-zero and stealing market share with ease.
  

In 2023 alone, West Africa contributed over a third of all new mobile money accounts globally. That's huge. Nigeria, Ghana, and Senegal have gone beyond adoption and become a driving force.

While Anglophone West Africa is riding the fintech wave, Francophone Africa has a different vibe.

• Orange Money is the dominant player, offering a more structured, telco-driven model.
• The ecosystem is growing steadily, especially in Senegal, Mali, and Côte d’Ivoire.
• Regulatory frameworks from the BCEAO had opened the door for licensed non-bank providers to thrive as early as 2006.
  

The growth isn’t as flashy as Nigeria’s, but it’s reliable and increasingly cross-border thanks to economic unions like WAEMU.

Here’s where it gets a bit complicated.

• South Africa has a mature banking system, so mobile money has had less room to grow compared to the rest of Africa. However, as of beginning of 2024, 32% of the population had a mobile money account with a majority of the account holders being women.
• Zimbabwe, on the other hand, turned to EcoCash out of necessity, using it as a hedge against hyperinflation and cash shortages.
• Botswana and Zambia are slowly expanding adoption, with more people getting on board as mobile wallets integrate with social services and remittances.
  

This region may not be leading the charge, but it’s still in the race, especially as interoperability improves.

Mobile money has evolved way beyond “send money” and “buy airtime.” These platforms are morphing into full-service financial ecosystems, and it's evolving faster than traditional banks ever did.

Now, we’re seeing:

• Instant micro-loans based on airtime usage and transaction history.
  
• Savings wallets that offer interest.
  
• Insurance products bundled into apps, funeral cover, crop protection, even health insurance in some cases.
  

And these aren’t theoretical tools. They’re live and running in countries like Kenya, Ghana, and Côte d’Ivoire.

• In 2023, half of all mobile money providers offered credit, and nearly a quarter were pushing insurance products.
  
• Services like Orange Bank Africa’s Tik Tak loans are approving microloans in seconds with no paperwork and zero human bias.
  

For many, these services are their first and only access to formal finance. No bank account? No payslip? No problem, your phone knows your financial behavior better than your bank ever did.

If you think this is only about private sector innovation, think again. Governments are also heavily involved in mobile money adoption.

Mobile money has become the go-to for:

• Distributing pensions, salaries, and subsidies, especially in rural areas.
  
• Emergency aid during crises like floods or pandemics.
  

This is a more efficient and transparent way for the government to distribute these funds. Mobile money disbursements leave a digital paper trail, reducing corruption and leakage.

And NGOs have caught on as well. Humanitarian organizations now use mobile payments to deliver support directly to people in hard-to-reach areas. Faster, safer, and way less humiliating than standing in a long line for a "handout".

As much as we love a good success story, mobile money isn’t bulletproof. There are some cracks in the system, and if they are not addressed, all the meaningful progress might come to a standstill.

Different countries have different rules. Some helpful. Some… not so much.

• Nigeria took years to open up mobile money licensing for telecoms, which delayed the launch of MTN MoMo and Airtel SmartCash.
  
• Ghana and Tanzania imposed taxes on mobile transactions that caused usage to drop (who would've thought?)
  
• Cross-border payments are still a mess, over-regulated in one country, completely unregulated in the next.
  

What we need are cohesive policies and clear frameworks. Regulators who understand the value mobile money offers to the economy is beyond convinience, it has become the backbone of people’s livelihoods.

For years, mobile money in Africa operated in silos, each provider's ecosystem was a closed loop, limiting users to transactions within the same network. However, this landscape is rapidly changing.​

M-PESA Global: Safaricom's M-PESA Global service now enables users to send and receive money internationally, including transfers to other mobile money platforms. By dialing *840# or using the Safaricom app, users can initiate cross-border transactions seamlessly. ​

MTN MoMo: MTN MoMo has strengthened its cross-border capabilities, allowing users to send and receive money across different countries and mobile networks. Through the MoMo app or USSD codes like *182*1*3#, users can easily initiate international transfers, making mobile money more accessible beyond local markets.

Orange Money: Orange Money has expanded its services to allow transfers across different networks. In countries like Cameroon, users can send money from MTN Mobile Money to Orange Money accounts via the GIMAC platform.

These advancements signify a move towards greater interoperability among mobile money services in Africa. While challenges remain, such as varying regulatory environments and infrastructure disparities, the progress made thus far is promising.

Where there’s money, there’s fraud. And mobile money has introduced its own flavor of headaches:

• SIM swap attacks that let scammers take control of accounts.
• Phishing via texts, calls and emails, pretending to be from your mobile operator, asking for PINs. P.S. Never give your PINs.
• Fake "You received money" SMS scams that trick unsuspecting users into sending refunds for money they never actually got.
  

We’ve all "received" money from an "Alex" who won’t stop calling until you block his number, and maybe even report him to your auntie’s WhatsApp group for good measure.

Operators are stepping up: biometric verification, fraud alerts, smarter AI monitoring. But let’s be honest, most users aren’t reading terms and conditions for digital services they use daily. Digital literacy is lagging behind digital adoption, and scammers are cashing in on the gap.

With over half a billion e-commerce users projected in Africa in 2025, mobile money is becoming integral to online transactions. Platforms like M-PESA and MTN Mobile Money are increasingly integrated into digital marketplaces, facilitating seamless payments for goods and services as more Africans take to online shopping while credit/debit card penetrations remains low.

Additionally, mobile money services have been expanding to include utlility payments, school fees and fines further integrating it into everyday life. As the evolution of mobile-first economies continues, it is necessary to build interoperable, secure and fast services.

Mobile money platforms are becoming full-fledged financial service hubs. In Kenya, M-Shwari and Fuliza, both offered by Safaricom in partnership with commercial banks allow users to save money and access short-term credit directly from their phones. In West Africa, MTN MoMo and Orange Money are rolling out micro-insurance to millions who have never interacted with a formal bank. These services are often underwritten by AI-based credit scoring, using transaction history and airtime usage instead of traditional credit checks.

This shift is not only expanding access but also empowering users to build financial resilience. Savings products help encourage saving and protect users against income volatility, while insurance services mitigate risks like crop failure or health emergencies, transforming mobile money into a safety net for millions across the contient.

Technologies like blockchain and artificial intelligence are being gradually adopted to strengthen the mobile money ecosystem. Blockchain, for instance, is being tested in cross-border transactions to ensure transparency, reduce costs, and eliminate intermediaries. In Southern Africa, pilot programs have begun to test blockchain-based remittances that promise faster and cheaper alternatives to legacy systems like SWIFT.

Meanwhile, AI is playing an increasingly critical role in fraud detection and financial inclusion. Mobile money operators are using machine learning to assess lending risk, flag suspicious transactions, and tailor financial products to user behavior. These technologies are creating smarter, safer, and more efficient financial systems for mobile money users.

The mobile money market in Africa is projected to grow at a compound annual growth rate of 18.31% between 2025 and 2033, with new players entering and legacy platforms expanding into underbanked regions. Countries like Ethiopia, where the mobile money sector was previously restricted, are now opening up to private competition with Safaricom's M-Pesa leading the charge. This signals a new wave of growth beyond the early-adopting regions of East and West Africa.

The rapid expansion can be attributed to smartphone penetration in the region and the increasing mobile network coverage in areas where banking services are scarce. This growth is also attracting global investments from fintech companies and venture capitals, which will in turn further accelerate accessibility and innovation in the industry.

Africa's mobile money landscape has transformed from a novel concept to a cornerstone of the continent's financial ecosystem since it's beginning in 2007 with M-Pesa. The integration of mobile money into various sectors, from e-commerce to insurance, signifies a broader shift towards a more inclusive and digital economy. This shift is what happens when everyday people are given access to tools powerful enough to reshape how things are done.

While challenges remain, including some regulatory barriers, problems with infrastructure and a scammy 'Alex' blowing up your phone, the trajectory is clear. Mobile money is proof of what can be done when innovation meets necessity. With continued innovation, strategic partnerships, and a focus on user-centric services, mobile money is poised to drive economic growth and financial inclusion across Africa and maybe the world.

As we look ahead, the question isn't whether mobile money will continue to shape Africa's financial future (because obviously), but rather how different stakeholders can harness its full potential to foster sustainable development and prosperity for the continent and beyond.