DAKAR (Reuters) - IT technician Mansour Diagne is one of the lucky few in Senegal to have a bank account, but when he needs to pay some bills or transfer cash to his sisters on the other side of the crowded capital Dakar, he reaches for his mobile phone.

Fewer than 20 percent of adults in the West African nation have a bank account and 26-year-old Diagne says the charges for using his are too high anyway, so he keeps at least 40,000 CFA francs ($82) in his mobile money account for transactions.

Diagne said he goes to a near-by sales point for Orange Money - one of five operators of mobile money services in Senegal - and hands over cash. The vendor credits his account with mobile money which he can then use to top up his phone, carry cash in a "digital wallet", pay his utility bills or transfer funds to other subscribers.

"It is like having cash on you but safer because you don't have to carry the actual money on you all the time," said Diagne, sitting behind the counter of his shop lined with stacks of old computers that he repairs and sells.

Diagne has heard that users in Kenya can do much more with mobile money such as pay for groceries, buy a bus ticket, pay a taxi fare and even receive payments from clients. He would like the same, but those options are not yet available in Senegal.

Since the launch of M-Pesa by Kenya's Safaricom in 2007, operators have rolled out mobile money services in several African countries to cater for millions of people who lack affordable bank accounts.

Operators, regulators and experts alike are excited by the service's possibilities but, apart from in a handful of sub-Saharan African countries such as Kenya, Uganda and Tanzania, the spread of mobile money has been slow.

Industry players say a fragmented and tough regulatory environment is holding the industry back. Experts say another obstacle is that users often lack the technological skills needed to use the service.

Consulting firm McKinsey said in a February report that mobile money had failed to catch on quickly even in areas of Africa where relatively few people have bank accounts.

"This is partly the result of uncertainty about whether Kenya — where M-Pesa has become one of the few mobile-money success stories — is unique or the potential for mobile payments in other markets is similarly robust," it said.


FEW SUCCESS STORIES

At the end of last year, there were more mobile money accounts than bank accounts in nine developing countries mostly in sub-Saharan Africa, mobile industry lobby group GSMA said.

About 61 million active mobile money customers were using the service globally, up from 37 million in 2012, GSMA said. The potential is vast: 2.5 billion people in developing countries lack access to banking services, yet one billion of them have a phone that would allow them to use the mobile money service.

In Kenya, M-Pesa has 13 million active customers. Transactions grew 22 percent and contributed 26.6 billion shillings ($303 million) or nearly a quarter of Safaricom's revenue in the year to March 2014.

French telecom operator Orange, which runs Orange Money, has seen significant growth with about 10 million customers worldwide, most of them in the West African CFA franc zone.

Thierry Millet, vice-president for Orange Mobile Payments and Contactless, said the total value of mobile money transactions made on its networks topped 2 billion euros ($2.7 billion) last year and is expected to exceed 4 billion in 2014. He did not specify how much revenue this generated for Orange.

In Uganda, South Africa telecoms giant MTN launched its own mobile money in 2008. The service contributes about 15 percent of the total revenue of MTN Uganda and as much as a fifth of the country's economic transactions are done through MTN mobile money solutions, said an MTN executive.


COERCIVE REGULATION

For mobile money to grow faster, regulators must encourage investments while guaranteeing fair competition, and assuring customers that systems are secure and their money is safe.