Mobile wallets have not made a massive impact in the West, but in sub-Saharan Africa the new online bank accounts are fast becoming the primary way to store money and pay bills.
In a report from the World Bank, it claims 12 per cent of Africans use mobile wallets or mobile money accounts unassociated with local banks. That is 64 million African citizens that are using mobile payments as a primary tool for wages and spending, a lot higher than in Europe and the US where credit and debit cards reign supreme.
Out of the 64 million, over half of the people don’t have any connection to a traditional bank account. The mobile wallet acts not only as a money storage service, but offers cheaper loans, repayments and other debits traditionally only available using a bank account.
Why the surge in sub-Saharan Africa? Well, most of it is to do with the inexpensive mobiles, but a few other factors like prominent mobile wallet services, better rates and easy to use services, accompanied by traditional banks not being that warm to low earning citizens.
The launch of these mobile wallet services has increased the amount of people who own a financial account by 10 per cent, to 34 per cent in the region. That is still one of the lowest amounts globally, but it is progress nonetheless.
There is still some issues when it comes to mobile wallet services, like being tailored towards men and not featuring common credit card features like interest rates, ISAs and share savings - but most Africans seem to be fine without these luxuries.
In the West, we are starting to see the growth of services like Apple Pay and Google Wallet, both want to be the mobile version of PayPal with additional functionality. The split from eBay this year could allow PayPal to look towards opening a global online bank, but the company has shown no signs of this move.