Mobile money platforms not fully utilised—report

Despite notable progress made on mobile money evidenced by the increase in both the volume and value of transactions in the last 10 years, utilisation of the same remains limited to specific transactions, data shows.

Reserve Bank of Malawi (RBM) data contained in the latest National Payments System Report shows a sustained increase in mobile money subscribers, which rose to 64.4 percent as of March this year from 58.1 percent in December 2022 but concentrated to a few transactions.

According to the data, the volume of airtime top-ups remain mostly used transactions constituting 45 percent of the transactions.

This is followed by cash in and out transactions at 34 percent and person to person and merchant payment transactions at eight percent and 4.8 percent, respectively.

Reads the report in part: “The rise in mobile money transactions indicates that more individuals in the country are utilising mobile money services.

“This spike in usage presents an opportunity to expand the services offered such as enabling the collection of non-tax revenue by different government departments and agencies.

The bank said there is need to sensitise the public to the benefits of embracing mobile money for payment of goods and services and other third-party payments.

“This will ensure increased usage of mobile money services for a wide array of use cases as opposed to using cash and other paper-based payment instruments,” reads the report.

The data further shows that geographical distribution of the agents remains a challenge as the majority of them are located in urban and semi-urban areas with rural areas having fewer numbers to serve the huge population.

For instance, out of the total number of agents, only 22.9 percent or 58 663 are geographically located in rural areas and the rest are in urban and semi-urban areas.

Reacting to the      report, Consumers Association of Malawi executive director John Kapito bemoaned the high transaction fees and security lapses of mobile network operators, saying these as limiting factors to the full utilisation of mobile money provisions.

“What has been observed on these platforms is their unreliability and that not much has been done to create confidence among traders and consumers that there are concerns regarding the safety of these platforms,” he said.

Kapito said unfair and unrealistic charges to conduct other transactions on these platforms and the fraudulent acts experienced by consumers have been a setback for consumers.