Africa has been experiencing significant growth in the payments industry in recent years, with a focus on expanding access to financial services for the unbanked and underbanked populations. Here are some trends and developments to watch for in the African payments industry:
- Blockchain Technology: Blockchain technology has the potential to transform the African payments industry by increasing efficiency, reducing costs, and improving security. Several blockchain-based payment platforms have already been developed, and more are expected to emerge in the coming years. 2022 capital raises include Yellow Card (South Africa) – $40M, Nestcoin (Nigeria) – $6.4M and Centbee (South Africa) – $1M
- Digital Currencies: The adoption of digital currencies such as Bitcoin and Ethereum is also growing in Africa, with several startups offering crypto payment solutions. The use of digital currencies could help to reduce transaction costs and increase financial inclusion, particularly in countries with high inflation rates.
- Mobile Payments: The adoption of mobile money services has been growing rapidly in Africa, with over 40% of adults in Sub-Saharan Africa using mobile money accounts. This trend is expected to continue, with more players entering the market, and the emergence of new services such as mobile banking, digital wallets, and P2P payments. In Dec 2022, Visa has pledged to invest $1 billion in Africa by 2027 to help boost the continent’s digital transformation and strengthen its payment ecosystem “through new innovations and technologies.”
- Cross-Border Payments: The growth of intra-African trade is driving the need for more efficient and affordable cross-border payment solutions. Several companies are working on solutions to address this challenge, including blockchain-based platforms, mobile money interoperability, and digital currencies.
The GSMA estimates that by 2025, there will be over 600 million registered mobile money accounts in Africa, representing a significant increase from the current number of 469 million accounts. Combined with the growing number of payment startups, that venture out of the traditional payment space, the African payment industry is bound to thrive.
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