Mobile money operators

September 2019

By  Alondra Gutierrez and Sophie Buisset, Smart S&D team

Herman Singh, former managing executive of m-commerce at Vodacom, argued in 2014 that mobile commerce and associated digital services would be the fourth big money spinner for mobile operators as the voice, SMS, and data waves wane. This year, GSMA reported that Mobile Money Operators who offer adjacent services to mobile money like savings, credit, or insurance products have on average 24 percent higher ARPU than providers that do not offer any of these products. 

As mobile money operators evolve into digital marketplace platforms, MNOs move away from transaction-fee based models and look to further develop the mobile money ecosystem by becoming an enabler that connects third parties with consumers.

Digital marketplaces provide users with products and services from different third parties. Payments are made for most of the transactions, which makes this kind of platform highly compatible with the mobile money industry. Mobile money providers expand their value proposition by leveraging their assets and transforming it into a multi-sided model.

The future of mobile money operators

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The Digital Marketplace Platform approach will reduce the dependency of mobile money providers on revenues stemming from customer fees. MNOs must look for ways to compensate for the loss in voice revenue and leverage the high penetration rate in the African market. Mobile money providers agree that transaction-fee based models are not where the growth lies for mobile money. There is a need to increase the revenue coming from mobile money, and a transition to a platform-based approach will enable them to transform their revenue model and expand their value proposition to new products and adjacent revenue streams to ensure their business remains sustainable in an increasingly competitive landscape. 

For mobile money operators, the adoption of a platform-based model would mean transforming into a digital marketplace platform. This would allow MNOs to go a step further than simply providing an integrated payment solution. This strategy will increase the mobile money value proposition by facilitating third parties to deliver products and services through a digital platform that eventually addresses a broadened user base.

On the other hand, mobile operators have a lot to gain from becoming an enabler by leveraging their assets to provide a unique advantage to the FinTech community. According to GSMA, startups in the financial sector and mobile operators may be the perfect allies due to complimentary hallmarks: while FinTech startups bring rapid innovation and flexibility, mobile operators provide powerful access to the market with their marketing and distribution capabilities. Operators also provide some specific enablers at scale that can facilitate their partners’ deployments.

MNOs have many assets and capabilities that can be leveraged for a Digital Marketplace Platform:

Mobile money operators have differents assests and capabilities to leverage
Source: GSMA


As Mobile Money Operators tap into the potential of a digital marketplace platform, some operators have already begun their transformation. Here are some of the examples of burgeoning digital marketplace platforms in Africa:

Makoso and mobile money operators
Mpesa’s Masoko

This e-commerce platform in Kenya was launched by Safaricom in 2017 and follows the marketplace model used by Amazon or Alibaba. Masoko screens merchants and provides e-commerce enablement services such as payment processing or customer support channels. Safaricom benefits from M-pesa’s dominant position in Kenya’s mobile payments market in order to scale. Recently, Safaricom has announced its intention to expand to other Sub-Saharan countries in 2020. So far the telco has opened its platform to more than 1,600 FinTechs. Today, its open API allows for SMEs to connect directly to the platform, which is driving innovation and adoption from the users as the offerings grow.

Jumila and mobile money operators

Nigeria-based Jumia (formerly known as Africa Internet Group) is Africa’s largest e-commerce company, with operations in 23 countries. As of December 2018, Jumia had over 81,000 active sellers and 2.7 million active shoppers. The case for this marketplace platform involves some of the most important MNOs in Africa, as MTN, Millicom, and Orange have all invested in Jumia. What began as an online retail model in 2012 has since evolved into a marketplace platform.

MTN’s financial services marketplace
Mobile money operator MTN plans to become a digital market place
Source: MTN capital markets day report

In May 2019, MTN revealed its plan to become the largest financial services marketplace in Africa. By targeting the 60 million active MoMo users, MTN aims to be the number one FinTech in Africa. MTN first intends to enable payments to merchants and companies via MoMo to later build the app into a “financial services marketplace” allowing third-party suppliers to connect directly to the platform. MTN envisions the platform to offer both MTN financial and insurance products to external suppliers. MTN’s move is part of a shift by financial services firms to turn their banking apps into platforms, allowing third parties to build-in their products and access their customer bases.


The mobile money business model is facing the most profound change since the launch of the service more than a decade ago. Leveraging the assets and capabilities of the traditional mobile money model opens the door to new opportunities by adopting a platform-based approach. 

Operators seeking to evolve into a digital marketplace platform will dramatically improve the value proposition for both subscribers and merchants. As they move away from fee-based models, revenue growth is secured due to diversification, and core business costs are significantly reduced while gross margin increases. It also positively impacts market share through the increase of gross ads that maintain secure cash flow.

However, as MNOs evolve into a platform-based model, some challenges must be overcome to ensure the success of a digital marketplace platform:

Cultural shift for consumers

It is yet to be seen if the consumer is ready to adopt a business model like a digital marketplace platform. Customer behavior and culture could be a challenge when scaling user adoption. Customers are aware of mobile money services, but not all understand how it could be beneficial to them. On the other hand, there is a level of distrust for some operators’ brands or networks, and users could be hesitant to conduct diversified services on the platform. On the other hand, the two largest barriers to mobile internet adoption in Sub-Saharan Africa according to consumers are a lack of digital skills and literacy followed by affordability. 

Cultural shift for MNOs

Because the current processes and procedures of a telco could not be applied to this kind of model, new ones would need to be implemented. This kind of ecosystem would also demand agility and flexibility as a core attribute for decision-making. Platform models play by new rules that pose challenges to traditional firms that operate by old rules. Meanwhile, launching a platform-based model includes multiple complexities and requirements including complicated logistics and heavy technology and analytics requirements.

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Alondra Gutierrez business development manager

Alondra Gutierrez

Business Development Manager for Smart S&D product

Sophie Buisset Africa Manager

Sophie Buisset

Africa Sales Manager for Smart S&D product


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