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The key factors that will drive Mobile Financial services’ growth

Delve into the latest analysis on Mobile Financial Services growth! Ericsson and Juniper Research dissect key factors driving MFS evolution for Mobile Network Operators.

Acting Chief Commercial Officer (Financial Services)

The key factors that will drive Mobile Financial Services growth

Acting Chief Commercial Officer (Financial Services)

Acting Chief Commercial Officer (Financial Services)

The current situation for telcos is a tricky one – they face a market where traditional revenues are declining, and the market is uncertain. As such, any market that can generate additional revenue streams for operators is vital. Therefore, the MFS (mobile financial services) market is one of central importance, which can drive new growth for operators.

However, mobile money is a complex market, with many different trends, and it can be difficult to unpack the key factors to watch and for operators to prioritise for growth. To assist in this task, Ericsson and Juniper Research have created a new study What Will Drive Mobile Financial Services Growth, which has surveyed decision makers responsible for MFS at MNOs (Mobile Network Operators) across 4 key regions. The survey included 46 respondents from 46 MNOs in 35 countries, all from MNOs that offer MFS presently.

These top ten findings from the study are listed below:

  1. 40% of Mobile Network Operator User Bases Will Be Actively Using Mobile Financial Services in the Next Five Years
  2. 80% Growth in Mobile Financial Services Transaction Value Anticipated Over the Next Five Years
  3. Customer Incentives, Extensive Last-mile Networks and COVID-19 Digital Payments Surge Lead Top Ten Factors That Have Accelerated Mobile Financial Services Success
  4. Advanced Services to Drive Mobile Financial Services Growth Over the Next 5 Years
  5. QR Code, AI/ML and NFC Lead List of Technologies That Will Have Most Impact on Mobile Financial Services Over the Next Five Years
  6. Mobile Network Operators Are Focused on Extending Payments and International Remittances via Partnerships with Merchants and Money Transfer Operators
  7. Regulations and Taxation, Enduring Preferences for Cash and Security Concerns Are Key Challenges Inhibiting MFS Growth
  8. Service Portfolios Are Evolving Rapidly, with Banking Tech and Value-added Services Taking the Lead
  9. Mobile Financial Services Critical for Enabling Revenue Growth and Diversification for Mobile Network Operators
  10. Enabling SDGs, Access to Formal Financial Services and Financial Inclusion Are the Biggest Social Benefits of Mobile Financial Services

For this blog, we will examine two key findings – finding four and finding eight.

Advanced services to drive mobile financial services growth over the next 5 years

Ultimately in order to maximise their future chances, MNOs must understand what factors will drive MFS growth, and where to focus their limited resources. Operators stand at a crossroads in many markets, with competition from fintechs and banks, as well as social media financial services becoming paramount.

We asked operators which top factors will drive their growth over the next five years, and the answer we got could not have been clearer – MNOs expect advanced services to drive their growth over the next five years.

MFS providers currently earn the majority of their revenue from fees on conventional services such as P2P transfers, cash withdrawals and utility payments, as well as earning interest on the float balances they hold. However, this established situation is changing over time, with this traditional revenue being challenged by the market entry of new start-ups with competitive pricing. Therefore, in order to differentiate themselves, MFS providers must increasingly focus on advanced services like sophisticated micro-finance services, loans, overdrafts, BNPL, investments, merchant payments, bulk payments etc. By doing this, MFS providers can begin to transition their own large user bases to these more advanced services; driving additional revenue streams, offsetting the potential loss of business to new competitors, and reducing user churn.

Ultimately, MFS providers are anticipating a great deal of change. How they cope with these changes, and prepare for the future market will determine their success going forward.

The priorities for vendors are clear - enhanced user experience, greater personalisation, offering a comprehensive service portfolio, convenience and ease of use, security & trust and driving growth. As such, these priorities will reshape the way MFS providers operate; shaking up their revenue models, product portfolios and user experiences. MFS providers must prepare for this disruption now, or they will be left behind by new fintech and technology company competitors.

Service portfolios are evolving rapidly, with banking tech and value-added services taking the lead

The MFS market is highly varied, with MNOs taking different approaches based on which markets they individually operate within. When looking at which services MFS providers offer, there are a multitude of different ways in which services are provided. As such, we asked our respondents which services they presently offer, which they expect to expand in future, and which they do not intend to pursue. Their answers are revealing about the overall nature of the market, and reflect the different priorities MNOs have for MFS growth.

Figure 1: Categorisation of Different Services

Categorisation of Different Services

Source Juniper Research

1. Payments Services

All our surveyed operators offer basic payments services, which include money transfer, airtime recharge, bill payments, merchant payments and wallet-to-bank transfers.

Within the merchant payment category, the overwhelming majority of operators (90%) are offering in-store, online and QR code-based merchant payments.

NFC-based payments or companion payments cards are still relatively niche offerings according to respondents, but there is an appetite to offer these services in the future, matching previous answers.

International remittances and bulk payments are offered by over 75% of respondents, with these services being restricted by regulations in some countries. However, most operators want to offer and expand these services as they have high revenue potential, compared to more basic services.

Within bulk payments, MFS providers want to partner with enterprises for salary disbursement or governments and NGOs for financial-aid disbursement, and earn revenue, thereby reducing dependence on P2P transfers as a revenue source.

2. Banking Tech Services

The survey found that 60% or less of surveyed operators offer advanced or banking tech services including savings, loans, insurance, investments, overdrafts and BNPL, showing that there is progress to be made here.

However, the majority of respondents who do not offer these more advanced services were highly interested in offering these services in the near future or are already working on expanding their services to feature a number of advanced services, such as loans, overdrafts, BNPL, savings, insurance, pension schemes, share trading, crypto-payments and investments.

In the Americas, all surveyed operators indicated they either offered or wanted to offer access to cryptocurrency; reflecting strong interest in these services in that market. Within Africa, there was strong enthusiasm for offering insurance services, reflecting the well-established market for micro-insurance in the region.

3. Value-added services

Beyond payments, operators are also strengthening the value-added services they offer to enable them to deliver an engaging and holistic experience to users.

Cashbacks and loyalty were both offered by over 60% of respondents presently, with the remainder largely interested in rolling out these services in the future.

Services like gamification, Open APIs, super apps and mini apps, split bill payments, spend control, budgeting and analysis in comparison are not presently offered by many respondents, but these respondents were keen to offer them in the future; showing the appetite for value added services.

In Africa, over 90% of respondents wanted to offer super apps in future, showing the importance of this to MFS strategies over the next five years, as the African market becomes more advanced. In the Middle East, 100% of respondents wanted to offer a super app within the next five years, while in Asia Pacific, over 90% of respondents either wanted to offer a super app, or already did, showing the importance of this.

4. Emerging Services

Within the more future-looking area of services, CBDCs or blockchain-based payments, IoT payments and augmented reality-based payments typically are not offered by the surveyed respondents, but many of the respondents do want to explore the potential of offering these services over a longer time frame. This reflects the early stage of development of these technologies, but again means that MFS providers must leverage platforms that boast ambitious roadmaps that have the potential to leverage future innovation.

In analysing these services, clear patterns emerge within the future of the market. Fundamentally, a large number of MFS providers offer the same basic services, but are looking to diversify into a variety of advanced and value-added services to differentiate themselves.

MFS providers want to explore new services, and will require support from their ecosystem in achieving business model innovations, and from platform providers in enabling new use cases.


From only examining these two key trends, it is clear that a large amount of change is coming to the MFS market. MNOs understand their priorities, and as such, they need to choose technology platforms and vendors that enables them to reach their next phases of growth. If they get this choice right, they will be well set to capitalise on future market opportunities.

For further details on this study, diving into every one of our key ten findings, please download What Will Drive Mobile Financial Services Growth here.

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