Ericsson eyes mobile financial services growth in Africa

Swedish multinational Ericsson is best known as a networking and telecommunications company, but in recent years it has been pushing further into the mobile financial services (MFS) space, providing the underlying technology to major fintech brands like MTN Mobile Money (MoMo).

Ericsson's mobile money offering, the Ericsson Wallet Platform, equips telecom operators with the ability to provide MFS. The company is focused on improving financial inclusion for underserved African countries and communities, including bridging the mobile gender gap.

"I know most people do not know that Ericsson plays in the fintech space, but we are a very key player under our wallet platform. Today every fifth transaction that you find on mobile money passes through an Ericsson platform," Rosemary Kimaku, business development manager for MFS at Ericsson, told Connecting Africa in an interview.

She said Ericsson is not very visible in the retail market but has major customers in the business-to-business (B2B) space.

"Ericsson is primarily a technology service provider. So, we provide the underlying technology that powers any payment rail that wants to run on top – the wallet technology can run a mobile money provider, the payment technology can run a bank or any other payment player that has the requisite licenses to be able to hold financial transactions," Kimaku explained.

The Ericsson Wallet Platform already serves over 360 million mobile wallets across 24 countries and is the leading mobile money service in ten out of 20 low- and middle-income countries. It processes more than 2.6 billion transactions worth over $36 billion every month.

Powering African mobile money services

The firm's biggest client in Africa is mobile giant MTN, and the Ericsson Wallet Platform powers MTN MoMo transactions across the telco's footprint in Africa.

"Whenever you touch MTN MoMo, you are operating on our platform," Kimaku said.

Kimaku said Ericsson MFS also has other customers that have not been made public in countries like the United Arab Emirates, Saudi Arabia and Pakistan and is trying to expand its service to non-MoMo type payments.

She added that today Ericsson focuses strongly on telco customers, on the back of its telco business, but is looking to operate with non-typical telco customers such as traditional banks and the rising number of digital banks or "neo banks."

"Africa is not yet there, in terms of maturity [of digital banking]. Financial services in Africa are more leaning toward mobile money than banks. But we do believe, at least globally, especially in Asia and in Europe, there's a trend toward neo banking. So that would be an interesting space in terms of our longer-term strategy," she said.

She also shared that the company hopes to work with smaller payment players across the continent.

"Mostly we respond based on the maturity of the geographies we are working with, maturity of the customer, and maturity of the service. Also, the regulatory environment that allows the wallet to play. So as technology, we are ready for any financial institution. So it's just about how we fit into that," she explained.

Tackling the mobile gender gap

Kimaku believes greater access to mobile money options has created a watershed moment for financial inclusion in Africa, especially for women.

According to the GSMA's State of the Industry Report on Mobile Money 2023, women in low- and middle-income countries are currently 28% less likely than men to own a mobile money account – even as mobile money transactions are rising at unprecedented rates.

When asked about Ericsson's role in narrowing this gap, Kimaku said that mobile financial services are poised to level the playing field.

— This is an excerpt from a longer article on our sister site, Connecting Africa. Read the full story here.

— Paula Gilbert, Editor, Connecting Africa