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Telco-Backed Platforms Leads E-Wallet Market in Africa and the Middle East

by Fintechnews Africa 18 March 2024

Africa and the Middle East boast 12 prominent e-wallets. These platforms are primarily provided by telecom companies, enable users to varied operations from the mobile phones, including payments, money transfers and remittances, and are gaining ground at a fast pace, a market analysis by financial data company FXC Intelligence reveals.

The report, titled “The state of e-wallets: Africa and the Middle East”, looks at the e-wallet market in Africa and the Middle East, identifying the main players and exploring their offerings.

It highlights the region’s significant population of unbanked individuals alongside the increasing prevalence of mobile phones, which is fueling the adoption of e-wallets because of their convenience and ease of access.

This trend is evidenced by the World Bank’s Global Findex data, which reveal that in 2021, 50% of the population over the age of 15 had made or received a digital payment in sub-Saharan Africa and 45% in the Middle East and North Africa. In 2017, those number stood at only 37% and 34% respectively, implying an increase of more than 10 points for each regions and showcasing the rise to prominence of e-wallets.

The African and Middle Eastern e-wallet market

The report highlights twelve significant e-wallet platforms in Africa and the Middle East. All of these platforms are staged e-wallets, meaning that they hold value directly and can have funds added to them, and most of them are available for use on mobile phones without need for additional applications.

Most of e-wallets in Africa and the Middle East were launched by telco providers, highlighting the dominance of telcos in the region’s digital wallet landscape. These telco-backed platforms typically offer their services across countries where they have a pre-existing presence, and have proved important to financial inclusion owing to their ability to reach the unbanked and remote populations.

Four of the 12 e-wallets showcased in the report have multi-country coverage and have grown into regional leaders, while eight are solely national providers.

E-wallet platforms with multi-country coverage

Airtel Money, M-Pesa, MTN Mobile Money, and Orange Money are identified as prominent e-wallet platforms in Africa and the Middle East. All of these platforms were launched by telcom providers, and facilitate various financial transactions such as transfers, bill payments, and international remittances.

Orange Money was first launched in 2008 in Côte d’Ivoire by telco provider Orange. It offers a range of services, including domestic and international money transfers, bill payments and airtime top-ups, and boasts a massive user base of 80 million customers across 17 countries.

MTN Mobile Money is another prominent e-wallet in Africa and the Middle East. The service, first introduced in 2009 by the MTN Group in Ghana, enables users to manage their money using their mobile phones, and claims more than 50 million users and 900 million transactions processed monthly.

Finally, the two remaining regional e-wallet platforms are M-Pesa and Airtel Money, both originating in Kenya. M-Pesa is a pioneering mobile phone-based money transfer service, payment platform, and micro-financing solution. It was launched in 2007 as a collaboration between Vodafone and Safaricom, the largest mobile network operator in Kenya, and has since grown into one of the largest mobile money services in Africa, serving a staggering 56.7 million customers across seven countries.

Airtel Money, meanwhile, is a mobile money service offered by telco provider Airtel Africa. Airtel Money provides a range of mobile money services, including payments, micro-loans, savings, and international money transfers, and serving 31.5 million customers across 14 markets.

Key national e-wallet providers

In addition to the four leading regional e-wallet platforms, the FXC Intelligence report also spotlights national e-wallet providers across Africa and the Middle East, showcasing the most successful and fastest-growing platforms across the region.

OPay currently stands as the most popular and adopted national e-wallet in Africa, boasting 35 million customers. Launched in 2018 in Nigeria, OPay is a financial service providers, offering a range of convenient and innovative solutions including mobile payments, money transfers, bill payments, micro-loans, and point-of-sale (POS) services to merchants.

Paga is another prominent provider from Nigeria which claims over 19 million users. The platform, which was launched in 2009, allows users to instantly send and receive payment, make international money transfers, pay bills, recharge their phone, and more.

In Tanzania, Tigo Pesa is the leader in the market, serving over 10 million customers. The service, introduced by telco company Tigo in 2008, allows users to perform various financial transactions using their mobile phones. In Egypt, Vodafone Cash is an e-wallet service provided by telco Vodafone Egypt that provides 11 million customers with peer-to-peer money transfers, payments, savings products and access to micro-loans.

In the Middle East, STC Pay, a service launched by Saudi Telecom in 2018, is the most prominent e-wallet provider, claiming eight million users across Saudi Arabia and Bahrain. In the United Arab Emirates (UAE), Klip, Payit and e& Money are popular e-wallets, boasting 1.2 million, 1.1 million and 0.5 million users, respectively, according to FXC Intelligence.

National staged e-wallet providers in Africa and the Middle East, Source: FXC Intelligence, July 2023

The report highlights the proliferation in partnerships between e-wallet providers and money transfer operators in Africa and the Middle East to support cross-border transfers. Western Union, MoneyGram, WorldRemit, Remitly and Ria are the most prominent partners, having inked partnerships with nearly all of the e-wallet platforms highlighted.