No products in the cart.
- Latest
- Trending
ADVERTISEMENT
When I founded MFS Africa over a decade ago, I set a simple bar for business success. To facilitate access to my mother’s honey business in Porto Novo, Benin, and to collect payments from customers across the continent.
Mobile money must continue to evolve and interoperability is key
When it comes to Africa and economic empowerment, we must recognize that consumers have the same wants and needs as consumers elsewhere in the world. You want to place an order for an electrical appliance and have it delivered in a timely manner. We can all agree that mobile money has done a lot to expand financial inclusion, but much more needs to be done to make seamless purchases outside countries and continents. sexuality must be realized.
This means the industry must enable merchants to accept payments from any consumer, whether the consumer uses mobile money or a card, online or offline. . To understand the scale of the opportunities that interoperability presents, it is worth looking at the African retail sector. Knight Frank reports that online retail accounts for only 1% of his sales in the multi-billion dollar sector, compared to his 15% global average. The interoperability of cards and mobile money not only brings the ratio closer to global standards, but also has the potential to grow the sector as a whole. After all, the appetite is clearly there.
According to a Visa report, e-commerce sales in Africa increased by 42% between 2019 and 2020 due to the Covid-19 pandemic. Imagine the growth you’ll see when people are able to seamlessly buy and sell, no matter where they are or what channel they’re using.
This focus on interoperability represents a slight shift from the mobile money narrative that has dominated the discourse so far (even this narrative is overly focused on M-Pesa’s success in Kenya). (some might argue that people in other parts of the continent are simply considered unbanked). ).
In many ways, it’s understandable that there’s been a lot of focus on the mobile money story in Africa. According to the GSMA’s 2022 industry report on mobile money, Africa’s mobile money transactions will grow by 39% to reach $701.4 billion in 2021, accounting for 70% of the global total. . As a result, many of the world’s largest digital merchants have started accepting mobile money payments, including the likes of Spotify in partnership with dLocal.
The GSMA estimates that by 2025, around one million young people across Sub-Saharan Africa will be in informal employment in the mobile sector, many of them working as mobile money agents. Much of the growth in mobile money is due to the fact that many Africans do not have traditional bank accounts. However, despite the acceptance of mobile money, there are still cases where cards are the preferred payment method for both consumers and merchants.
It is therefore imperative to change the narrative that Africans no longer need to adopt cards thanks to mobile money. Instead, the focus should be on facilitating interoperability between mobile money and cards and facilitating mass adoption.
For the African fintech revolution to reach its true potential, interoperability cannot be confined to the continent. It should be completely borderless.
This means that African consumers and businesses alike should be able to make payments to any destination, online or offline. This means connecting mobile money all over the world. Card networks appear to be the best way to do so, and the recent launch of M-Pesa’s virtual card with his Visa shows how quickly international players are awakening to the need for interoperability. emphasizes whether
We are now at a stage where every mobile money user’s dream of having a card attached to their mobile money account becomes a reality. Mobile money must continue to evolve and interoperability is key if our continent is to unlock the full potential of the fintech revolution.
