Digital payments revolution in Africa

Africa’s B2B payments sector may appear saturated, with high-profile companies facilitating global transactions. However, despite notable growth, the continent’s payments landscape remains largely untapped. Marked by low card penetration and a preference for localized methods, Africa’s diverse payment preferences and technological disparities hinder global merchant acceptance.

The continent’s payment methods vary widely, from account-based transfers and debit cards in Nigeria to mobile money dominance in Kenya and Ghana. South Africa, on the other hand, favors card payments. Overcoming the challenges of credit card scarcity and regulatory barriers, alternative payment methods (APMs) are emerging as transformative forces, catering to the varied needs of Africa’s 54 countries.

With only a 3% credit card penetration, Africa leads in alternative payments, with nearly 70% of the volume and over half of global mobile money users. Juliana Etcheverry, Director Of Strategic Payment Partnerships & Market Expansion at EBANX, highlights the appeal of APMs, stating, “People want to make instant payments without jumping through multiple hoops.”

The rise of APMs in Africa addresses a significant hurdle for international businesses—adapting to diverse local payment preferences. These methods bridge the gap between global merchants and African consumers, fostering inclusivity and accessibility. SMEs benefit from efficient and cost-effective payment solutions, fueling economic growth and entrepreneurship.

APMs significantly contribute to financial inclusion by bringing unbanked populations into the formal financial ecosystem. Wiza Jalakasi, Director, Africa Market Development at EBANX, emphasizes how APMs bridge the online and offline worlds, enabling digital payments through vouchers and mobile money.

The evolution of APMs in Africa paves the way for innovation and adaptation. Businesses investing in understanding and integrating these methods position themselves at the forefront, gaining a competitive edge. Aligning with local preferences builds trust, enhances customer loyalty, and establishes sustainable relationships.

By 2025, an estimated 70% of all online transactions across Africa will use APMs like digital wallets, mobile money, and instant payments. The rapid rise of APMs signals a transformative shift, powering Africa’s digital economy and promising a future of financial inclusion, economic growth, and innovation.

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