Angela Itzikowitz, Executive; Era Gunning, Executive; & Amelia Warren, Associate; Banking and Finance at ENS
For years, telecom operators were seen as connectivity businesses. They built networks, sold airtime, carried data and linked people, homes, enterprises and devices. That picture is changing. In many markets, telecom operators are no longer only connecting people to information. They are increasingly connecting people to money, and that shift is starting to look less like an adjacent business and more like a structural evolution in digital finance.
That scale matters. Once digital payment volumes reach meaningful size, mobile money stops looking like a side offering and starts looking like financial infrastructure. It also changes the strategic question. The issue is no longer whether telecom operators belong in financial services at all. In many jurisdictions, they already do. The more important question is what role they will play next: distributor, regulated partner, platform operator or something closer to a bank.
The direction of travel is already visible. In East Africa, M-Pesa has evolved well beyond basic wallet functionality into a broader ecosystem that includes payments, transfers, merchant services, lending and access to investment products. Across other markets, telecom-led platforms are increasingly combining wallets, QR payments, cards, merchant tools, remittance functions and embedded financial access in ways that would once have been seen as the domain of banks or standalone fintechs.
What makes this especially important is that the real opportunity is not merely launching another app. Telecom operators already control assets that matter enormously in financial services: customer reach, SIM-linked identity, recurring billing relationships, extensive distribution networks and daily relevance in lower-value, high-frequency transactions. Those are precisely the areas where traditional financial institutions often struggle to scale efficiently, especially in relation to micropayments, merchant acceptance, remittances, underbanked customers and real-time digital access. The strength of the telco model is therefore not just technological. It is infrastructural.
That broader shift is also becoming more visible in South Africa where. Yoco, an all-in-one digital commerce platform has recently partnered with Apple to enable Tap to Pay on iPhone locally, allowing merchants to accept contactless in-person payments using only an iPhone and the Yoco app, without needing a separate payment terminal. On one level, that is a merchant-acquiring and device-enablement story rather than a telecom story. But it is still relevant to the same trend. It shows how the mobile device itself is increasingly becoming part of the payments layer, and how software, hardware, connectivity and financial access are converging in a way that reduces friction for merchants and consumers alike. Yoco already serves more than 200,000 small businesses in South Africa and processes over USD1 billion in card payments per year, which makes this a meaningful local example of digital financial infrastructure becoming more embedded and more accessible.
That does not mean every operator should become a bank. In some markets, the more effective model may be partnership, with the telecom operator controlling distribution and customer interface while a licensed bank provides balance sheet and regulated product capability. In other markets, the better model may be a broader fintech ecosystem built around the operator’s network, identity layer and payment rails. In a smaller number of cases, the trajectory may move further toward digital banking. The endpoint may differ, but the strategic trend is becoming harder to ignore.
For incumbents and regulators, that shift deserves close attention. It raises familiar questions around licensing, prudential risk, conduct oversight, consumer protection and competition. But it also reflects something more fundamental. In many markets, the institution that solves everyday access to digital value may not look like a traditional bank at all. It may look like the operator or platform that already sits closest to the customer, in the phone, in the SIM, in the payment prompt and in the merchant’s daily flow.
The businesses that succeed in this space are therefore unlikely to be the ones that try hardest to imitate banks. They are more likely to be the ones that use their existing strengths to solve the access, identity and distribution problems that banks and standalone fintechs often find hardest to solve at scale. That is why telco-led financial services matter. They are not simply extending connectivity into finance. They may be reshaping who occupies the financial trust layer of the digital economy.
ENDS
