In many rural parts of Africa mobile money has not gone beyond the simple sending and receiving of funds, despite the expansion of the technology to merchant services.
For example Safaricom, Kenya's leading telecommunications company and the home of the M-Pesa service, launched Lipa na M-Pesa (Swahili for "pay with M-Pesa"), which lets merchants accept mobile money payments, in 2013. In Kenya, people can pay for things like electricity, water and pay TV via their mobile phones.
Safaricom recently announced that it has been able to convert only 5 percent of cash payments into mobile money payments, but is still aggressively acquiring merchants for its payment platform. The company commands nearly 80 percent of the mobile money market in Kenya, having registered 20 million users as of March.
The low number of mobile money payments across the continent could be a symptom of a lack of knowledge of the uses of M-Pesa, especially for people living in rural areas.
Rural users "usually come to a bank branch having forgotten the mobile phone at home," Eddie Ndichu, Regional Head of Digital Banking at Chase Bank, said at the recently ended East Africa Com event in Nairobi.
Ndichu explained that many people living in rural areas don't think of using mobile money to pay for goods and services.
Delia Dean, a project manager with the Bill and Melinda Gates Foundation who is working with MTN Uganda to extend mobile financial services to the rural poor, said that even though there is great adoption of mobile money in Uganda, most people have not moved to use the service to do other things.
"There is a very limited use case developed by telecom and the banks beyond the person-to-person transaction. We have to become more innovative and increase the service offering beyond what it is currently," Dean said.
However, banks have made big gains introducing virtual accounts in Kenya. Virtual accounts are mobile money accounts fused with banking services, enabling users to deposit and withdraw cash using mobile wallets.
At the end of April this year, Kenya Commercial Bank (KCB) announced that its collaboration with M-Pesa to open virtual accounts spurred people to open over 1 million accounts within a month.
A similar initiative with Commercial Bank of Africa and Safaricom, named M-Shwari, has now clocked 5 million virtual accounts and nearly 1 million loan accounts, outpacing numbers from even the fastest growing banks in Kenya over the course of two years.
These successes suggest that mobile money payments might be offered by many industries if educational campaigns are carried out by telecom operators.