Mobile money agents have been instrumental in bringing financial services to unbanked and underbanked populations across Africa and other developing countries. In countries like Tanzania, Kenya, Rwanda, Uganda, Nigeria, and elsewhere, agents have powered the continent’s mobile money revolution.

Initially, agents — so-called ‘human ATMs’ — were responsible for cash-in and cash-out transactions primarily. However, there are signs that the role of mobile money agents is changing. They now offer more support, services, and sales for an increasingly large variety of service providers.

And that’s a trend that’s likely to continue.

In the future, agents will do more and will probably be aggregated by a few operators who create platforms that others can plug in to.

Here’s what I think will become of agents in Africa:

  • Agents will do more and become interoperable. Mobile money agents will offer a wider range of financial & digital services beyond basic transactions, such as microloans, insurance, savings, e-commerce, mapping, delivery, sales activation, field campaigns, and investment products offers by different principals. This diversification will enhance their value proposition and contribute to increased revenue.
  • Agents will earn more. Agents will increasingly adopt digital tools and platforms, making their operations more efficient. And integrations with new providers and systems will enable interoperability and enhance the end customer experience, resulting in more activity and increased agent commissions with lower costs.
  • Agents will predominantly be operated by giants. As the industry continues to grow and expand, it’s increasingly likely that larger firms will dominate the agent model. These giants will be able to offer greater resources and support to mobile money agents, including specialized services and training. This market shift is driven by the need for greater efficiency and effectiveness in the industry. And with the complexity of mobile money and digital services increasing, it is becoming increasingly difficult for smaller agent operators to keep up with the demands of the market — providing a competitive advantage for larger players. And these giants will likely take advantage of opportunities to build platforms that offer access to other participants in the market for a fee. Early signs and signals here include SANEF in Nigeria and Tanda in Kenya.
  • Agents will be offered as a service to fintechs, telcos, banks, and others. By partnering with established agent network operators, fintechs, telcos, and other firms can quickly scale their offerings, reaching a larger customer base in a shorter time frame. Outsourcing agent services also enables these players to focus on their core competencies, such as product development, while leaving the tedium of agent management and operations to specialized service providers. Ultimately, ‘agent-networks-as-a-service,’ a term coined in this article, provide cost efficiency, scalability, speed to market, and other benefits. Early examples here include Selcom serving a number of banks, telcos, and even Mastercard in Tanzania, and SABS in Uganda.
  • Most agents will be out of business by 2050. As the role of mobile money agents continues to evolve, it’s likely that larger entities will dominate the industry in the future. While this shift presents some opportunities, it also presents challenges for mobile money agents, especially small independent agents. Similar to how Amazon continues to crowd out small, independent retailers/e-tailers, independent agents across Africa are likely to succumb to industry pressures.

The mobile money industry and the digital services arena across Africa are dynamic and rapidly changing. Larger platforms that offer agent-networks-as-a-service are likely to dominate.

But whatever the future holds, it’s clear that agents, in some form, will continue to play a critical role in bringing financial services to underserved populations and driving the growth of the digital economy across Africa.

By Reuben Mwatosya

Reuben Mwatosya is a co-founder & Chief Operating Officer of Tembo, a fintech that helps innovative companies embed and launch banking & financial services products to end users across Africa. Connect with him on Linkedin.