Page 335 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

In their 2015 report, the GSMA found that the growth of mobile money users transacting OTC has decelerated
since 2013. The annualised growth rate for the number of the OTC users was 22 per cent in 2015, compared
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to 33 per cent in 2014 and 102 per cent in 2013. Further, in South Asia, where OTC usage is especially high,
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the 19 per cent year-on-year growth of OTC is less compared to the 46.6 per cent growth in registered accounts
in the region. Moreover, in Bangladesh, 55 per cent of registered mobile money users started using OTC and
then subsequently registered for a mobile money account. To the GSMA, this suggests that the increased
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focus of providers to migrate OTC users to use mobile money accounts is bearing fruit. 25
Further, over the past few years we have seen industry-leading numbers of account registrations in both
Bangladesh, and Pakistan where OTC is prevalent. These numbers are often overshadowed by OTC usage,
but they illustrate that offering OTC does not limit providers from expanding adoption of mobile money
accounts. For instance, bKash had an estimated 3.5 to 4.4 million active accounts (30-day basis) in August
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2014. Further, Pakistan’s biometric SIM registration drive looks like it could be driving impressive growth in
account registrations (see Figure 1). In addition, GSMA has pointed out that providers in Pakistan have also
made significant investments in ecosystem and interoperability initiatives to make accounts more compelling
to consumers.
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Compiling data from The State Bank of Pakistan, we note that in March 2015, account registration grew 39
per cent from the previous quarter, to reach over 7.5 million registered accounts (around 7 per cent of SIM
holders in Pakistan). Riding on the same growth wave in October 2015 , the number of registered mobile
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accounts in Pakistan increased to about 13.2 million, of which approximately 39 per cent are active on a 90-
day basis, and 25 per cent are active on a 180-day basis. These large numbers are certainly buttressed by the
large populations in these South Asian countries, but ample credit should also be given to the providers, as
other populous countries like India, Nigeria, and Indonesia show us that large populations do not necessarily
result in robust growth in digital finance.

Figure 1 – Account registration in Pakistan (Q4, 2011 to Q1, 2015)

Cumulative Quarterly Account Registration in Pakistan
8
Millions 6 7 Hockey Stick inflection point? →

4 5
3
2
1
0
Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Source: Branchless Banking Newsletter, State Bank of Pakistan Available at: http:// www. sbp. org. pk/ publications/ acd/ branchless. htm

22 GSMA.State of the Industry Report on Mobile Money, 2016. http:// www. gsma. com/ mobilefordevelopment/ programmes/ mobile-
money/ industry- data- and- insights/ sotir
23 It should be noted that the total number of mobile money OTC users may actually be much higher, as GSMA’s figures only
account for formal OTC usage that mobile money providers can track.
24 InterMedia 2013, Bangladesh Country Survey.
25 GSMA. State of the Industry Report on Mobile Money, 2016. http:// www. gsma. com/ mobilefordevelopment/ programmes/ mobile-
money/ industry- data- and- insights/ sotir
26 Anastasia Mirzoyants and Mike McCaffrey. The Human Touch Required to Evolve Digital Finance, Nov. 2014. http:// www. helix-
institute. com/ blog/ human- touch- required- evolve- digital- finance
27 GSMA.Building digital societies in Asia: Making commerce smarter, 2015. https:// gsmaintelligence. com/ research/ 2015/ 11/
building- digital- societies- in- asia- making- commerce- smarter/ 531/
28 Branchless Banking Newsletter, State Bank of Pakistan Available at: http:// www. sbp. org. pk/ publications/ acd/ branchless. htm

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