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Mobile Banking: Mauritius still lagging behind African Peers

Woman Using Mobile Banking

Mauritius lags behind its African peers when it comes to mobile payment. Mobile transactions rose from Rs 1.4 billion in September 2019 to Rs 2 billion in September 2020, that is a growth nearing 72%. Mauritius to tackle connectivity issues for better mobile banking performance.

Mauritius is a highly monetized economy. Popular payment instruments are cheques, credit cards and debit cards. While cash may have traditionally been king, the Covid-19 pandemic has accelerated the pace of digital payment adoption through the use of mobile and internet banking. 

With a population of around 1.26 million, Mauritius boasts 445 ATMs, with a value of transaction averaging Rs 16 billion for the month of September 2020. More than 1.4 million debit cards and 267,000 credit cards are in circulation in the country. 

While Mauritius leads the pack in various socio-economic indicators in Africa, it still lags behind some of its peers, when it comes to mobile payment. The project of introducing e-cash is still in its preliminary stages since its introduction 8 years ago…

The MCB was the first to introduce mobile banking services in Mauritius in 2012, allowing its customers to perform mobile transactions with ease and rapidity. While Kenya on the other hand introduced mobile banking in 2004, making them more experienced and advanced in the market.

Official data from Bank of Mauritius shows a constant increase in the number of mobile payment subscribers. However, the increasing trend is halted in the month of April when the lockdown was announced but is immediately followed by an increase the following months.

Covid-19 is accelerating digital payment adoption

The value of transactions rose from Rs 1.4 billion in September 2019 to Rs 2 billion in September 2020, that is a 72% growth rate. The number of mobile subscribers exceeds 1.2 million, as at September 2020 (Sept 2019: 1.1 million). 

In order to perform better in terms of mobile banking, or any services in the middle of a pandemic, connectivity plays an important role. According to the IMF research, if internet access is expanded in sub-Saharan Africa by an extra 10% of the population, it could increase real per capita GDP growth by 1-4 percentage points. 

According to cable.co.uk, Mauritius global rank is 126 with a mean download speed of 7.28 while Kenya is globally ranked 122 with a mean download speed of 8.20.

Why comparing these two African countries? Well, Kenya has the second mobile payment utilization rates after global leader China. Transactions via mobile wallets and phones represent 87% of the country’s GDP.  This is according to a recent report by Boston Consulting Group (BCG) titled Five Strategies for Mobile-Payment Banking in Africa.

Kenya, is ranked 64th according to the inclusive internet index 2020 by the Economist Intelligence Unit (Mauritius is not included in the list).

Kenya is the third highest ranked African country in the index after South Africa and Morocco. It is also well known in the market as it has innovative mobile apps and is compared well with other countries from the index in terms of e-finance and e-health content.  

Statistics for the period covering September 2019 to September 2020 show a growth of 32% in the value of transactions in Kenya, from 365.91 billion Kenyan Shilling (3.33 USD)  to 483.21 billion Kenyan Shilling (4.40 USD). In terms of subscriptions, Kenya has reached 64.3 million for the month of September 2020, that is more than its current population, 52.5 million inhabitants. 

Kenya’s impressive performance can be attributed to its high-speed internet balloons launched in July 2020, which is being provided by Loon, a subsidiary of Alphabet Inc. known to be Google’s parent firm.  

Loon launched 35 internet balloons which aim to provide internet services to the isolated areas of Kenya. The latter implemented the internet balloons mostly to ease accessibility in terms of information and getting in touch with relatives and family during the pandemic. The internet balloons are a first in Africa and one balloon is able to provide internet connectivity to an area of approximately 80km in diameter serving 1000 users on the ground.

Kenya currently has its connectivity infrastructure through a national fibre optic cable which is similar to Mauritius. 

In contrast, despite having new facilities such as Juice, MyT money, internet banking and the newly launched unlimited internet data package for mobile users. Mauritius still has a lot of progress to make to reach its African peers.