The State of Mobile Money in Nigeria 2022: Milestones, Gaps and Untapped Opportunities

Mobile money’s growth has been phenomenal, processing over a trillion dollars in 2021. But what’s the situation in Nigeria?

Sustainable and Inclusive DFS
5 min readApr 19, 2022

When mobile money emerged in 2007, it was a curious experiment.

Having the ability to send and receive money with nothing but a simple mobile phone seems like something you’d read about in a Jules Verne novel or a science fiction movie from the 80s. But today, that curious experiment has grown into an innovative juggernaut facilitating the transfer of billions of dollars across the world.

The GSMA State of Mobile Money report is an annual measurement (and celebration) of mobile money’s yearly journey as the financial inclusion ecosystem reviews the progress of this innovation over the past 12 months since the last edition.

As the world strived to return to some measure of normalcy, even as the covid-19 pandemic persists, mobile money has waxed stronger and stronger. In 2020, mobile money crossed an important milestone — on average, the mobile money industry processed more than $1 billion in international remittances per month. Such an incredible achievement further solidified mobile money’s legitimacy as it facilitates money flows for millions of people around the world.

In this article, we summarise some of mobile money’s biggest milestones in 2021 as well as the most exciting developments within the industry. We will also highlight the outstanding gaps and untapped opportunities as reported in the 2022 GSMA State of the Industry report along with important lessons gleaned.

Let’s begin:

COVID — a catalyst for Mobile Money

Mobile money has a history of thriving in the midst of crisis.

In 2007, when Safaricom kicked off the mobile money phenomenon with the launch of M-Pesa in Kenya, it coincided with the country’s post election crisis (PDF) when widespread violence led to banks being closed. Kenyans turned to MPesa to send money to relatives and that became the trigger that eventually made MPesa a household name and mobile money a global phenomenon. Mobile money rose to the occasion again in 2020 and 2021, thriving in the midst of the COVID pandemic and its aftermath.

The COVID-19 pandemic spurred a dramatic shift to digital payments and platforms across the world. That shift continued into 2021 pushing the value of mobile money transactions to the trillion-dollar mark — a milestone reached faster than anyone in the industry predicted.

Merchant payments skyrocketed due to people increasingly paying for everyday goods and services through their mobile money accounts, bulk disbursements surged as more companies started paying salaries directly into their employees’ accounts, and governments partnered with mobile money providers to deliver much-needed pandemic relief payments.

Even more remarkably, despite the economic uncertainty, international remittances also grew by 48 percent in 2021, as diasporas around the world continued to send money home.

A trillion dollars in 2021

In 2021, mobile money transactions increased by 31%, hitting US$1 trillion in transactions. Unsurprisingly, majority of those transactions (more than 80%) were P2P and Cash in, Cash out transactions. On the average, P2P transactions topped 1 billion per day in 2021. However, merchant payments witnessed the greatest surge (about 100% increase from 2020).

Experts believed mobile money would hit the trillion dollar mark in 2023, but the pandemic moved the mark one year earlier with the mass migration to digital. Indeed there is a clear trend towards a more digitised mobile money ecosystem as more cash is converted into e-money and either continues to circulate as such or is spent digitally rather than being cashed out.

Mobile money regulation

Over the past decade, mobile money’s growth has hinged on the tenacity and ingenuity of innovators and the willingness of regulators to reform policies to create an enabling environment for mobile money to expand from a niche offering to a mainstream financial service.

While regulation is still evolving in several markets, one thing that is evident is that mobile money’s growth was enhanced by the unbundling of the traditional banking model. The initial fear that MNOs providing financial services would place the financial system at risk notwithstanding, regulators eventually realised that as long as MMOs could fulfill AML/CFT and KYC requirements, outsource non-core banking functions and safeguard customer funds (by ensuring at the least, a traditional bank held the deposits which back the electronic value), mobile money could extend financial services to the last mile in a safe, secure and sustainable manner. This is what has helped unlock financial services, particularly mobile money, in a big way.

Mobile Money in Nigeria

Mobile money may be waxing stronger than ever, but the story remains relatively bleak in Nigeria. Mobile money continues to lag many of its Sub Saharan counterparts in account openings, and transaction value. Mobile money account ownership is still low with only 12% of men and 7% of women having a mobile money account. The biggest barriers according to the GSMA report are the dominance of cash and the presence of alternative ways to transfer money.

Nigeria’s reliance on cash is unsurprising — in 2019, we wrote that mobile money’s biggest competition is cash due to non-consumption of financial services as citizens prefer cash. Last year we also noted that mobile money’s lagging growth in Nigeria is because Nigeria has a highly developed payments infrastructure and with several alternative ways of transferring money — USSD banking, mobile apps, Payment Service Banks, ATMs, agent networks/banking and so many more. These alternatives are highly interoperable, hence mobile money is playing in an already saturated space.

The mobile money gender gap also tells a distressing story — the gender gap in mobile money account ownership is 46% points which is perhaps the highest in Africa. Ironically, female mobile money users are more likely than their male counterparts to have sent money to their friends and relatives using mobile money over the last 12 months. This suggests that, when women are able to surmount the inhibitors to mobile money access, they tend to use it more than men.

Untapped Opportunities

Last year, our DFS state of market report examined the state of partnerships across the ecosystem and identified opportunities for operators to work together to advance financial inclusion in Nigeria. The GSMA report also earmarks partnerships as a necessary ingredient to increase the value proposition of mobile money in frontier markets.

For example, partnerships are unlocking mobile money-enabled insurance in African countries. The report highlights the transformative impact of microinsurance, with its ability to shield millions of people from economic shocks that would otherwise keep them locked in poverty. Underserved citizens usually rely on three main coping mechanisms in times of duress: loans from friends, family and community members, life savings and selling assets. With insurance, reliance on these coping mechanisms will reduce, providing them with greater security and peace of mind.


Mobile money has come a long way since its humble beginnings in Kenya. Today, millions of men and women are participating in the formal financial system using mobile money as the gateway. A true phenomenon, individuals, communities, public and private institutions are all reaping the socioeconomic benefits.

According to the GSMA report, the key to further growth of the ecosystem will be diversifying mobile money’s value proposition. Beyond P2P transfers and cash-in/cash-out transactions, the growth of partnership driven “ecosystem transactions”, such as bill payments, bulk disbursements, merchant payments and international remittances, together with interoperable transactions, should account for a greater share of the global mobile money transaction mix.



Sustainable and Inclusive DFS

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