Decline in ATMs in Mozambique versus Growth of Digital Financial Services

Mozambique’s ATM and POS coverage has declined for five years, now at 7.4 per 100,000 adults. Simultaneously, digital wallet agents have surged to 1,686 per 100,000 adults. The government is seeking to tax EMIs, while bank accounts increased by 10% to 6.2 million, yet EMI accounts have risen to almost 20 million, illustrating a shift towards mobile financial services.

The number of automated teller machines (ATMs) in Mozambique has declined for the fifth consecutive year, now standing at 7.4 machines per 100,000 adults, according to the Bank of Mozambique. This marks a significant decrease from 11 ATMs per 100,000 adults in 2019, culminating in a total of 1,413 ATMs by the end of last year. Similarly, point-of-sale (POS) payment terminals have also seen a decline, dropping from over 229 per 100,000 adults in 2019 to 190 in 2024, amounting to a total of 35,470 terminals nationwide.

Conversely, the number of digital wallet agents and Electronic Money Institutions (EMIs) has witnessed substantial growth. The report indicates that the coverage of EMI agents reached a record 1,686 per 100,000 adults in 2024, a significant increase from 350 in 2019. Mozambique has three EMIs owned by the mobile telecommunications operators, which facilitate financial transactions through mobile phones, enabling easier access for the population.

The number of EMI agents has continued to rise, with a reported increase of 12.2% in the first half of 2024, surpassing 252,000 agents across all 154 districts in the country. The government has considered taxing the commissions earned by agents and EMIs as part of its revenue collection strategy, with current estimates showing nearly 20 million active accounts within this segment.

Recent government documents detail plans to implement this taxation framework, including a bill submitted to Parliament aimed at expanding the tax base of digital financial services. Additionally, 787 mobile wallet agents have been registered and assigned tax identification numbers, signifying the official commencement of their activities.

In terms of financial accounts, Mozambique has experienced a 10% growth, with the total reaching 6.2 million bank accounts in 2024. However, the number of accounts with EMIs has surged even higher, growing by 18.5% during the same period to approximately 19,870,700 accounts, nearly three times more than traditional bank accounts. This is a marked increase from just under 11 million e-money accounts recorded in 2020.

The financial landscape in Mozambique reflects a concerning trend with the continual decline of ATMs and POS terminals, evidencing the challenges of traditional banking facilities. However, the rise in digital wallet agents and EMIs suggests a significant shift towards mobile banking solutions, highlighting the public’s growing reliance on technology for financial accessibility. While the government explores taxation of EMIs, the impressive growth in digital accounts showcases a dynamic adaptation to modern financial practices.

Original Source: clubofmozambique.com