Market Overview

Juniper Research: Mobile Merchant Transactions in Emerging Markets Drive Financial Inclusion, More than Doubling to 3.8bn Annually in 2023


Unbanked Individuals to Spend $22 billion on Merchant Payments in
2023, Rising from $9.7 billion this Year

A new study from Juniper
forecasts that the use of mobile devices to make retail and
store payments will act as a driver for financial inclusion of the
unbanked in emerging markets. The research forecasts that mobile
merchant transactions by unbanked individuals will grow from 1.8 billion
per annum in 2018 to 3.8 billion by 2023.

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QR & NFC Technologies Deliver Growth and Efficiency

The new research, Mobile
Financial Services in Emerging Markets: Mobile Money, Loans, Savings &
Insurance 2018-2023
, finds that Kenya and India will be core
incubator markets for merchant services. Safaricom's Lipa Na M-PESA
product already has over 100,000 merchants enrolled, and by 2023,
merchant payment transactions in the Middle East & Africa alone will
surpass $16 billion per annum.

The research singled out Mastercard as a key innovator in the sector.
The company has launched a QR code-based solution with the aim of
connecting 40 million micro and small merchants to its payments network
by the end of 2020.

Research author Lauren Foye explained: "Previously merchant payments
relied upon SMS to facilitate transactions, with customers texting a
code to initiate payment; thus the process was slow and inefficient.
With QR code solutions, shoppers simply scan a merchant code to rapidly
initiate the payment process."

Merchant Payments: Fast Roll-out & Lower Costs

The research praised mobile merchant payments as they make digital
transactions accessible to a much broader segment of society (as a Point
of Sale terminal is not required). To nurture this, the research
recommends that players provide value added services, such as
microloans, analytical tools and advice for businesses, in addition to
SMS-based marketing services, in order to drive engagement. Juniper
cautions that tariff rates must remain low, citing the fact that Lipa Na
M-PESA was obliged to impose a 50% reduction in fees last year, both to
address customer indifference and ward off competition.

Juniper Research provides research and analytical services to the global
hi-tech communications sector; providing consultancy, analyst reports
and industry commentary.

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