Ericsson Set to Expand in Mobile Financial Services
In Africa, where the majority of transactions are still cash-based, Ericsson sees immense potential for growth in the Mobile Financial Services (MFS) industry. The Swedish tech giant aims to be a leader in banking-as-a-service in Africa, with one in five mobile wallet transactions occurring via its platform.
Ericsson's partnership with MTN, Africa's leading mobile operator, has been instrumental in this growth. MTN Mobile Money now serves 72.5 million users across Africa, with an estimated value of $5.2 billion. The MFS landscape in Africa has expanded to include various financial offerings such as bill payments, lending services, buy-now-pay-later (BNPL) options, and cross-border remittances.
Michael Wallis-Brown, Global Head of Ericsson Mobile Financial Services, has stated that the company aims to position itself as a comprehensive financial services platform. Facilitating user-friendly interactions is crucial for the progression from basic transactions to more complex financial services. The Ericsson Wallet Platform has successfully integrated 3,000 third-party partners into its application programming interface (API).
The Ericsson Wallet Platform has reached 457 million registered mobile wallets and approximately 114 million active users across 24 countries. The platform processes 36 billion transactions each year, with a total transaction value of $501 billion. MTN Mobile Money's growth has been bolstered by a $200 million investment from Mastercard.
However, the MFS landscape in Africa is not without challenges. Regulatory environments across different African nations pose challenges, and a cohesive regulatory framework that supports commerce across the continent is needed to facilitate economic growth. Ericsson is focusing on creating a stable and secure environment for its partners, aiming to build robust regulatory structures in markets like Ghana, Uganda, and Rwanda.
The pursuit of expanding MFS in Africa will enable both large corporations and small businesses to expand and thrive in a dynamic pan-African economy. There is a growing convergence between the telecommunications and banking sectors, with the integration of financial services into mobile networks becoming increasingly important for security and efficient transactions.
Ericsson has successfully integrated its mobile financial services platform in Kenya, Nigeria, and South Africa, with plans to expand further across additional African countries in the coming years. The company has positioned itself as a significant player in the MFS industry, aiming to capture around 50% of the MFS market, up from its current 10%.
Know-your-customer (KYC) protocols and digital identities play a significant role in building trust within the MFS financial ecosystem. Ericsson is focusing on creating a secure and trustworthy environment for its users, ensuring the continued growth and success of MFS in Africa.
