Market opportunities in mobile money: Tanzania

The mobile money revolution in Tanzania has been nothing short of impressive. Mobile money was introduced to Tanzania in 2008 and started with less than 200,000 subscribers. Eight years later, Tanzania has become a world leader in mobile money. The number of registered mobile money user accounts has proliferated to over 16.5 million, accounting for 32% of the nation’s adults. The growth has brought financial inclusion to the large percentage of the population that does not have access to formal banking services (currently, only 2% have a traditional bank account).


The poor level of financial inclusion has been brought about by four main challenges: – 70% of Tanzania’s population is rural, making travel to urban areas for financial services costly and time-consuming – Poor customer education and communication around financial offerings – High costs associated with financial services – Regulatory requirements-often a lack of documentation prevents financial inclusion.

Providers and their offerings

Tanzania was the first country in the world to achieve full interoperability. The country’s largest mobile network operators (MNOs) joined with two of the major banks, CRDB Bank and National Microfinance Bank, as well as the Bank of Tanzania, to establish a set of operational regulations. Users of different mobile money services can move funds between accounts of various MNOs, and between mobile money accounts and bank accounts. The interoperable payment ecosystem in Tanzania has substantially contributed (and continues to) to the increase in transactions across network operators. What this means for merchants is that it is much easier to offer one standard method of payment instead of the current state of play in many countries, where competing payment providers offer separate point of sale (POS) devices that only serve themselves. Having one universal POS device, or even QR code, will increase uptake and transactions at a consumer level because it will reduce confusion and which in turn increases customer satisfaction. It also opens the door for other opportunities, such as using mobile money as the vehicle for distributing aid to displaced persons. This is the case in western Tanzania where Airtel is leading a pilot project distributing money via mobile to refugees instead of food parcels.The refugees can then use these funds to purchase other goods and services in a secure and reliable manner without many of the usual risks associated with carrying currency.


It’s true that NFC tags, wearables, and QR codes are starting to gain acceptance in growth markets. However, there are some cases where using a card makes more sense. For instance, some schools prohibit students from bringing a mobile device onto the school campus, so a companion card is a good alternative for paying school fees. Companion cards can also be used to distribute aid to displaced persons or welfare recipients. An aid organisation can load cards with funds that can be redeemed for essential items. That way, the agency and the recipients don’t have to worry about the security concerns of handling cash. Transport also is good use case for companion cards. Many bus and train stations already have card readers installed. In fact, sometimes the whole transport infrastructure has been set up and optimised for cards. The antenna in a card is larger than that in an NFC tag, and it’s easier for the reader to pick up the signal. So, in our experience, issuing companion cards is an efficient way to integrate mobile money. When it comes to paying road tolls, we have found that many people would rather use a companion card. They’d rather not hold their phone out the car window or hand it over to a taxi driver to pay the toll!

Choosing the right partner

With the growing increase in market potential, it is important that MNOs, aid agencies and financial institutions select a partner with vast market experience and expertise. Because each mobile money market is unique in its challenges and opportunities, you will want to side with a company that understands growth markets and can provide a range of solutions so as to give your company a competitive advantage and increase the rate of uptake.

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