Use the links in this page to see all the cross-references and discussions about the use of digital technologies in support of (formal or informal) finance, including mobile money, phone transfers, fintech apps across all the sections
Additional background
About digital money reserves
⁉︎ Most of the commercial money flux right now that are entering into the banking system are digital international transactions in USD, coming from individual remittances or to a slightly larger extent from international organisations. End of September, the Central Bank of Sudan has also provided liquidity to banks, but in the form of digital money not physical currency [75]. This creates liquidities in the sense of money that can be used for digital payments. But for the same reasons mentioned above related to restrictions on cash outs, these are money flux that are likely to remain digital and circulate only within the banking system. It should be noted that expatriates and foreign firms are not allowed to directly deposit US dollars into their USD bank accounts in Sudan, USD flows can only come from outside sources. On the other hand, Sudanese can deposit foreign currency in their accounts, but these would be converted in SDG so they simply choose not to! See below about Financial system
⁉︎ There are a significant amount of digital reserves in USD that were left behind by people who fled the country. Only international organizations and their staff were allowed to have a bank account in USD. With a lot of account holders within these organisations fleeing Sudan at the beginning of the conflict, there are currently possibly large digital reserves in USD sitting on bank accounts that are not being used or accessible to their owners [203]. See Recommendations > … > Liquidity constraints
About mobile money
!! Mobile money providers Mobile money has also grown ****in Sudan in recent years, and like other parts of the financial sector that rely on digital technologies, it has the potential for further expansion. Currently, there are three mobile money providers sharing the market in Sudan. In 2014, Sudan launched a centralised mobile money model, which was operated by the EBS on behalf of the CBoS. However, new regulations in 2020 allowed enterprises to operate their own mobile money platforms. To do so, they need to connect to the national mobile money switch through the Electronic Banking Services Company and obtain a financial institute license from CBOS. As a result, both the centralised and decentralised models are currently operating in parallel [115].
About the different types of mobile-based digital financial services
There are often confusion surrounding the terms mobile money, mobile banking and mobile wallets. While there is no strict definition, it is essential to understand the practical differences between the various options that exist in Sudan as well as crucial to recognize that these services have different constraints and functionalities.
Mobile banking refers to the use of a smartphone or computer to access and perform certain banking operations on existing accounts. However, the types of operations allowed are often limited in nature and amount. Mobile banking serves as an additional channel for existing bank customers, offering services such as deposits, withdrawals, account transfers, bill payments, and balance inquiries. It can be considered an additive model that provides convenience for customers without fundamentally transforming the banking experience.
On the other hand, mobile wallets are smartphone-dependent and rely on cutting-edge digital devices for functionality. To fully benefit from mobile wallets, users' smartphones must be suitable and equipped with the required hardware, such as NFC capability. Mobile wallets are typically linked to pre-existing bank accounts, credit cards, or other digital payment methods. Users can load funds into the wallet from these linked sources and use the wallet to make payments or transfers. This linkage to formal financial institutions simplifies funding but may exclude those without access to traditional banking services.
In contrast, mobile money services are designed to be accessible on basic mobile phones, including feature phones. These devices do not require advanced features like NFC and can operate on older or less sophisticated handsets. Mobile money operates on a cash-based model, allowing users to deposit physical cash into their mobile money accounts through authorized agents or outlets. This cash-to-digital conversion is a crucial aspect of mobile money's success in regions with limited banking infrastructure. Users can also withdraw cash from their mobile money accounts at agent locations. Mobile money is inherently linked to mobile accounts, reducing the reliance on traditional banks for transactions.
About mobile money
In Sudan, there are three mobile network providers with a total of over 22M mobile subscriptions. All three of them have partnerships with banks in the mobile money space. Mobile money services are regulated by the CBoS, but in 2020 mobile network operators were allowed to operate their own, decentralized mobile money systems.
The number of mobile payment transactions has been increasing in recent years, but still continues to represent only a very low proportions of financial transactions in the country (estimated at 5%). The slow rollout of mobile money can be attributed to factors such as high commissions for credit transfers as well as still complex KYC regulations for enrollment.