How Fragmented Payment Landscape Is Merging Through Digital Innovation
Mark Zuckerberg Meta CEO, said in 2019 that it is the time simplify the flow of funds and make sending money as simple as sending a photo.
Nevertheless, the statement, which was considered groundbreaking at that time, overlooked the fact that Africans had already been sending and receiving money without using traditional banking system for decade before that, said Praveksha Maharaj, director of partnerships MEA at Entersekt.
Maharaj added while an interview with PYMNTS that most of the Africans adopt technology at large scale and managed to dive into the future of digital payment, she was pointing towards the mobile money dealers and digital frontrunners like Kenya’s Safaricom.
In Africa M-Pesa a pioneering money move company, is considered most successful mobile payment system since its launch in 2007, increases financial embarrassment in the region, with more than 40 million active users and more than 500000 traders adopt M-Pesa as currency for payment of goods and services just in Kenya.
In Nigeria one of the immense economies of Africa, Maharaj added that the development of digital in contrast with the card payments or mobile point of sales has been considerable, with a powerful network of banking agents, often known as Human ATM’s provide bill payments, airtime charge, fund transfer and remittance services to customers.
This accomplishment, in spite of the infrastructure and economic threats common in Africa, are the evidence to Africans forwardness and innovativeness in resolving the region’s problems, she observed. In Africa we aren’t frightened of the challenges, we learn from them and adjust themselves according to the users’ need.
Among that background, she said that about the banking and payment innovation world can learn from the African Continent, particularly when it comes to establishing for large scale and assuring that the need of diversified range of customers has been met whether they are unbanked or have smart phones.
Not a One-Size Fits-All
Even with the raising admiration of the digital and electronic channels in Africa’s financial sectors, almost half the population doesn’t have bank accounts and transfer in cash, which make it difficult for them to approach digital financial services.
According to Maharaj, this has made fraud and security a major threat directed raising social planning and spoofing scams, a challenge she said splitting data among providers can solve is problem.
Shattered markets, 54 countries, more than 1.4 billion people and more than 2000 languages, making it more complex, aside from this different banking systems and currencies is also generating more problems for cross-board payments.
She explained that its not a one-size-fits-all. It is likely that you launch one thing in one region it could be acceptable in one country and may be rejected in other, as M-Pesa worked in East Africa but failed in South-Africa. This departing the importance of adjusting solutions according to the customer needs in each region.
But, even with these problems, Maharaj said that the strong growth in digital payments in Africa will continue to promote innovation on the continent and encourage others worldwide.
She added that I’m very expectant that it will go in the right way as we build a key that meets users need.
