Mobile money revenue of MTN Ghana far exceeded that of the largest Nigerian banks in 2020, according to a report by telecom expert, Eric Osiakwan

The Nigerian banks included FBN, Access Bank, UBA and Zenith Bank.

The leading mobile network in Ghana registered $216.4 million revenue from MoMo transactions in 2020.

This is compared with digital transactions of FBN ($141.2m), Access Bank ($136.8m), UBA ($130.2m) and Zenith Bank ($116.1m).

Importantly, MTN Ghana is making more money than MTN Nigeria ($112.7m).

According to the report titles “Are Mobile Operators the next Fintech Startups?”, MoMo operations of the mobile network operators made the most significant returns under the covid-19 pandemic because majority of transactions were done through their networks.

In Ghana, MoMo transactions outstripped cheques by $40 billion in the first quarter of 2021. This sent shock waves to the Ghanaian banking industry such that the banks are now forging collaborations as they fear for their future, the report explained.

Meanwhile, the report said Ghana is edging towards a state-backed digital currency to mitigate against the volatility of unregulated digital currencies, such as bitcoin.

The value of M-Pesa transactions in Kenya grew by 32.9% year-on-year to $82 billon in 2020, whilst the volume of M-Pesa transactions grew by 14.9%, to 5.12 billion transactions.

Orange's MoMo service also saw an 18.9% increase in active users to total 19.6 million customers by the end of June 2020. In Kenya, MoMo payment rate represents 87% of the country’s Gross Domestic Product. In Ghana the figure is 82%.

The report noted that these are the highest ratios in the world after China where mobile transfers represent 125% of GDP (this includes person-to-person transactions not included in GDP calculations).

On the contrary, South Africa where Vodacom and MTN reside, have not seen that much success with mobile money mainly because it has a solidly entrenched banking system, with 70% of adults having a transaction account.

Earlier attempts by both operators to introduce MoMo in South Africa failed but in February 2020, MTN relaunched its MoMo service with UBank and in December 2020, the mobile telecom giant claimed two million new customers.

MoMo outstripping bank transactions

Today, all major mobile network operators have MoMo operations, which has become their new cash cow to the detriment of the banks, the report emphasized.

It explained that in some markets such as East Africa, the mobile network operators, including Safaricom, are operating “banking services” directly competing with traditional banks, adding “in Nigeria, this has not been the case until the 3^rd quarter of 2020, when the Central Bank of Nigeria issued final approval to Glo, 9Mobile and Unified Payment subsidiaries to operate as Payment Service Banks (PSBs).”

In Ghana, the report said banks including Fidelity Ghana and Ecobank Ghana, managed to lobby the regulators to “force” the mobile network operators to work with them to deliver those banking type services.