Monday, April 15, 2024

Why digital payments are key to financial inclusion


Every day, hundreds of millions of payment transactions are completed across the African continent. They’re done using myriad technologies including cards, mobile money, and digital payments. By far the most, however, are in cash. Each of these competing payments is trying to dominate and defeat cash, with siloed “winner takes all” consumer payment offers, but which payment type can most effectively promote financial inclusion, helping grow economies and jobs along the way?

Given the success of mobile payments in Africa over the past decade or so, you might be surprised to learn that it isn’t the technology most likely to be a game changer for meaningful financial inclusion for the informal productive economy. Instead, the best hope for financial inclusion and growth on the continent is a digital payments platform that is merchant centric, and that benefits the artisans, SMEs, and small farmers. A payment that empowers the productive economy.

Cash and mobile money

At present, cash is still king in many African countries. According to one report, cash accounts for over 50% of transaction value in South Africa. This is despite South Africa having one of the most mature banking and payment spaces and the deepest card penetration rates on the continent. Read more…

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