Wave: the gentle revolution in mobile money in West Africa

Founded in 2018, Wave is a Senegalese-American fintech that has shaken up the mobile money market in West Africa with a simple model: ultra-low fees and an intuitive app. Its slogan: to make financial services accessible to as many people as possible. 

In the West African Economic and Monetary Union (UEMOA), where less than one adult in two had access to a bank account in 2020, Wave has  an unprecedented democratization of digital payments. In Senegal, its first market, the fintech has conquered over 50% market share in just a few years, prompting Orange Money and Free Money to review their tariffs.

Wave offers money transfers at 1% fee, with zero cost on deposits and withdrawals. This aggressive model, backed by a record fundraising round of $200 million by 2021, has convinced millions of users in Senegal, Ivory Coast, Mali, Burkina Faso and Benin.

Its economic impact is considerable: according to the GSMA, mobile money contributes over 6% of GDP in some countries in the region. Wave plays a key role in facilitating bill payments, phone top-ups, or shop purchases, and stimulating a new wave of financial inclusion, particularly among women and rural populations.

But the arrival of Wave, via a partnership with Commercial Bank Cameroun (CBC), could reshuffle the deck. Building on its success in West Africa, the fintech offers aggressive pricing: free deposits and withdrawals, 1% transfers. This approach has turned the markets of Senegal and ivory coast upside down, forcing incumbent operators to lower their prices.

This model could stimulate competition, foster financial inclusion, particularly in rural areas, and attract new users previously excluded from the system. But Wave will have to face several challenges: building a reliable network of agents, gaining the trust of merchants, and complying with strict rules imposed by Cobac, such as the ban on directly issuing electronic money.

The market could also see the emergence of Camtel, the public operator, which is planning its own mobile money solution in 2025. In this context, Wave’s entry marks the start of a new era of competition, likely to lower prices, improve services and expand access to financial services for millions of Cameroonians.

source: Agence Ecofin