Moctar BouraimaMobile money is a financial service that allows users to transfer money, pay bills and carry out other financial transactions through their mobile phones. It is particularly popular in Africa, where it allows people without access to traditional banking services to participate in the digital economy.
Mobile money played an important role in the spread of Bitcoin in Africa. It allows users to buy and sell Bitcoin easily and quickly. Additionally, it is possible to pay in Bitcoin via mobile money, allowing Africans to use the cryptocurrency to make everyday purchases.
Discover in this article how mobile money contributed to the explosion of Bitcoin in Africa.
The development of mobile money in Africa
Mobile money has become a popular form of payment in Africa, particularly in rural areas and low-income countries. In recent years, there have been more than 600 million mobile users in Africa, or about a third of the continent's population. Mobile money offers many advantages to unbanked populations, including:
- The ability to make payments and money transfers quickly and easily, including for financial transfers from the diaspora.
- Access to financial services, such as savings and credit;
- Protection against inflation and exchange rate volatility.
Definition of mobile money
Mobile money is a financial service that is also known as mobile payment or mobile money.
It works by linking a mobile phone number to a bank account or e-wallet. Users can then transact by sending or receiving money via SMS or using a mobile app. Among the best known and used operators, we can cite Orange Money, Wave and MTN Money.
Evolution of mobile money in Africa
Mobile money has experienced rapid development in Africa in recent years. In 2022, there were more than 781 million mobile money accounts in Africa, or more than half of the world's bank accounts.
This development is due to several factors, including:
- The high penetration of mobile phones in Africa (more than 90% of Africans own a mobile phone);
- The low penetration of traditional banking services in Africa (only 15% of Africans have a bank account).
Benefits of mobile money for Africans
Mobile money allows Africans to carry out money transfers and money withdrawals using their smartphone. It has become an indispensable tool for many Africans for many reasons.
- Financial inclusion: Thanks to mobile money, Africans are actively participating in the development of their country's digital economy.
- Ease of use: mobile money is a simple service to use, even for people with low literacy skills.
- Security: Mobile money is a secure service. Transactions are encrypted and user data is protected. This is important because people who use mobile money to manage their finances are often vulnerable people.
- Cost: mobile money is an inexpensive service, with transaction fees generally lower than those of traditional banking services.
The reasons for the adoption of Bitcoin in Africa
Bitcoin is booming in Africa. Recently, the value of Bitcoin transactions in Africa exceeded $1 billion. Factors contributing to Bitcoin adoption in Africa include:
- High inflation in some African countries;
- Exchange rate volatility;
- High transaction fees.
Inflation
Inflation is a major problem in Africa. In many countries, inflation rates are above 10%, meaning the value of the local currency is rapidly declining. This can have a negative impact on savers, who see their purchasing power eroded.
Bitcoin is a store of value that can protect savers from inflation. Indeed, Bitcoin is a deflationary currency, which means that its supply is limited. This makes Bitcoin an attractive safe haven for Africans who want to protect their money from the depreciation of their local currency.
The volatility of local currencies
African local currencies are often volatile. This means their value can fluctuate quickly, which can be a risk for investors and businesses.
Bitcoin is a more stable currency than local African currencies. This is because it is decentralized, meaning it is not controlled by a central bank or government. This makes Bitcoin a more attractive option for investors and businesses who want to reduce their exposure to risks associated with the volatility of local currencies.
High transaction fees
Transaction fees are high in many African countries. This can be a barrier for people who want to carry out financial transactions, including international money transfers.
Bitcoin allows transactions to be carried out at a lower cost than traditional money transfer services. This makes it a more attractive option for Africans who want to send money abroad.
The success of Bitcoin thanks to mobile money in Africa
Africa is one of the continents with the fastest adoption of bitcoin. By 2023, the continent would have more than 20 million bitcoin users, representing growth of more than 100% compared to 2022.
This success of the mother crypto can be explained by several factors. First of all, Africa often faces strong economic and political instability. In many African countries, inflation is high and the national currency is often volatile. Bitcoin, on the other hand, is a decentralized currency and its price is determined by supply and demand. This makes it a more stable means of storing value than local currencies.
Also, Africa is a continent where the banking rate is low. Thus, it offers an alternative to people who do not have access to traditional banking services. It allows financial transactions to be carried out quickly, securely and at a lower cost.
In addition, Africa is a young and dynamic continent. Young Africans are more comfortable with new technologies than previous generations. They are therefore more likely to adopt cryptocurrencies, such as bitcoin.
The African countries that adopted bitcoin the most quickly are the Central African Republic, Nigeria, Kenya and Ghana. These countries all have developing economies and low banking rates. They are therefore likely to benefit greatly from this crypto. It is also with this in mind that Senegal organized the Dakar Bitcoin Days, an initiative that aims to raise awareness of Bitcoin in Africa.
Bitcoin adoption in Africa is still new, but it has the potential to transform the continent's economy. Bitcoin could help reduce inflation, facilitate financial inclusion and stimulate economic growth.
Ease of buying and selling Bitcoin
Mobile money has made it easier buying and selling Bitcoin in Africa. Indeed, many mobile money companies now offer Bitcoin buying and selling services. These services are generally simple to use and allow users to buy or sell Bitcoin in minutes.
Mobile money has allowed many Africans to access Bitcoin for the first time. It has also contributed to the growth of demand for Bitcoin in Africa.
Payment in Bitcoin via mobile money
Mobile money also allows you to make payments in Bitcoin. This allows Africans to use cryptocurrency to make everyday purchases, such as food, clothing or services.
Many businesses in Africa now accept Bitcoin payments. These businesses include stores, restaurants, hotels and service providers.
Payment in Bitcoin via mobile money is a practical and affordable solution for Africans. It allows users to save on transaction fees.
International money transfer
Mobile money can also be used to transfer money abroad. This allows Africans to send money to their loved ones who live outside the country.
In fact, international money transfers via mobile money are generally cheaper than transfers via banks. They are therefore quicker and easier to perform.
Mobile money has contributed to the growth in the use of Bitcoin for international financial transactions. It is an affordable and practical solution for Africans who wish to send money to their country.
Conclusion
The explosion of bitcoin and mobile money in Africa has redefined the continent's financial landscape. As these technologies continue to develop, they contribute to the popularization of cryptocurrencies in the region. From this perspective, mobile money helps Africans gradually become familiar with bitcoin. Therefore, the development of mobile money and Bitcoin is expected to continue in Africa in the years to come. These two technologies have the potential to transform the continent's economy.
