5 Reasons Mobile Money Is Going To Die By 2020

Yesterday we updated that the number of mobile money users had exceeded 18 Million in Uganda, this is great news especially for the Telecoms and to the users, it shows the power of innovation and how easy things get once they are integrated with technology.

We now have more Mobile Money account holders than all the traditional banks in Uganda. As the banks are busy struggling to stay in the transaction business, the government has jumped on the trend of Mobile Money and is increasing taxes on every transaction so as to make money from the now 18 Million Customers. Telecoms are also in the business of making money and that is why they are not willing to let their piece of pie go. This causes more charges on the end user.

We now spend more money on Mobile Transactions than we used to spend in our traditional banks on Transactions. This I believe is going to be the first reason Mobile Money is going to be turned to it;s head.

Death Of  The Feature Phones: 

Gordon Moore the founder of Intel observed in 1965 that the number of transistors on an intergrated circuit, doubled every 12-24 months. This has been Moore’s law and it has held for atleast 60 years now. With this fact in mind by 2020, the feature phone business will be gone and I assume close to everyone will have a smartphone. Now if this holds, we shall fully be in the digital age.

Mobile Money as a service has thrived on the Feature phones and the rate of adoption of these gadgets, exponentially increased the adoption of the service.

Rise Of Digital Currency:

With the exponential increment in the power of the mobile phones and a slowly growing rate of connectivity, we see a new wave of digital startups entering the Ugandan market. People’s mind sets are changing in Uganda, we now order our food online or buy shoes from an online marketplace.

Slowly people are starting to trust the online businesses and slowly people are going to start transacting online. This creates an opportunity for a new form of currency call it a Digital Currency. We now deal in 1s and 0s, we don’t need to see something physically in order to buy it we can just do that digitally using the computers in our pockets, this creates a big opportunity and market for the digital Currency in Uganda.

The Unnecessary Charges:

Today if you have Shs 1 Million($400) on your Mobile Money, and withdraw 140000($56) in 7 batches, you will lose $10 (shs 25,ooo) in transaction charges. If you are a big organisation dispensing money to different parties in your organisation, you will need to pay withdraw charges or they will not get enough money.

With the rise in the Digital opportunities, we are going to need a service with a different business model in order to keep transacting.

I personally would subscribe to a service for a full year as long as it doesn’t charge me per transaction, with all these powerful devices and the internet we need to move from the pay per transaction model, because we spend a lot. What if 18 Million People were transferring money for as little as $20(Shs 50,000) a year? This would make it $360 Million Industry and am not sure about the Valuation after 6 Years.

Death Of Mobile Money:

If Mobile money doesn’t disrupt itself and change the business model to a close to free service, by 2020 it will be no more. I personally believe mobile money is going to be disrupted by a team of 5 developers, 3 marketing geniuses and 2 Investors who are willing to invest for the long term and this is a business that supports more than 20000 Agents and employees.

Final Word:

This goes to all telecoms and the other players in this market. The tides are changing, people’s mindsets are shifting, they might not trust some players now, but after 3 years they will and if you don’t pivot your business model and shift to like a subscription format, we have a different form of Mobile Money and you will be no more.

For now, Congrats on the 18 Million subscribers.

Tweet me your reactions @nickle_las


Nicholas Kamanzi

Computer Engineer and Tech Reviewer.


  1. Nice article.
    5 devs, 3 geniuses and 2 investors – are those magic numbers?
    For example, cant it work with 1 investor?
    Or is that the setup of your team working on the MM-killer?
    All the same, i think the reports about the death of MM are greatly exaggerated.
    It is such a big deal that Bank of Uganda is setting up new laws to get some of the action.
    (of course their official story is full of words like “regulation”)

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