Africa’s digital future beyond mobile money

It seems to be an exciting time for PayTech – payments technology – in Africa.

Across the continent, central banks and regulators are joining forces with the private sector to deliver a more streamlined and increasingly digitized payment ecosystem to meet growing consumer preference for faster electronic payment options, convenient and frictionless.

Related News: Bank of Ghana Unveils GhanaPay Mobile Wallet

Also related: PayU Strengthens African Footprint with Ghana, New BNPL and QR Products

This month, the Central Bank of Ghana launched GhanaPay, a mobile wallet designed for banks, savings and loan companies, and rural and community banks. The announcement comes the same month that payment service provider PayU announced its expansion into the Ghanaian market, coinciding with the company’s growing presence in Africa.

In an interview with PYMNTS, PayU South Africa CEO Karen Nadasenspoke about the growth potential of emerging markets in Africa as well as the challenges and opportunities that come with operating on the continent.

For Nadasen, PayU’s focus on emerging markets is directly linked to the company’s vision for financial inclusiveness, and helping to provide diverse payment methods is key to bringing millions of excluded Africans into the traditional bank into the financial fold.

To do this effectively, Nadasen stressed the need for good partnerships. “We do a lot of due diligence on the organizations we partner with, because responsibility for payments rests with all stakeholders in the national payments system,” she said.

As is the case elsewhere in Africa, in Ghana, mobile networks are an important feature of the country’s payments landscape, due to the growing popularity of USSD-based mobile money transactions. As such, finding the right network partners while adhering to the country’s regulations has been key in facilitating PayU’s entry into the Ghanaian market.

And because the company has partnered with local network providers, in addition to debit and credit cards, PayU customers in Ghana will be able to use mobile money payment methods including MTN MoMo, Vodafone Cash and Tigo. Weigh.

Now, with the launch of GhanaPay, the citizens of the country stand to benefit from even more cooperation within the industry. As mobile network providers, banks and FinTechs like PayU are increasingly able to take advantage of a shared infrastructure, businesses and consumers can move money in a more open, convenient and secure system. frictionless.

Africa catches the wave BNPL

The buy now, pay later (BNPL) market has exploded in recent years, accelerating the transformation of consumer payments through point-of-sale (PoS) financing.

According to Nadasen, PayU is also working with local players in other parts of Africa to offer this service through a partnership with South African company BNPL Payflex, allowing users of the PayU platform in the country to spread the cost of six-week purchases at zero percent interest.

Learn more: BNPL seduces African buyers

Citing the case of people earning a weekly wage, Nadasen added that BNPL is helping Africans make purchases they would have struggled to pay for before: “deferred payment options promote greater inclusion in Africa, especially when it comes to how people earn and spend. ”

The payment provider can offer BNPL and USSD payment options, building relationships with key local stakeholders, a point Nadasen was keen to stress: “We try to be locally aware and provide payment methods that people will actually use and benefit from. We don’t just want to take a global solution and implement it locally. We had to hire locally, we had to partner locally, we had to respect [local] regulations.”

Cross-border payments

With over 2,000 languages, a myriad of different currencies, multiple payment systems to navigate, and a patchwork of regulatory frameworks, operating in the African region can be an uphill battle.

Watch the interview of the deputy general manager of PAPSS: Instant payments expected to boost intra-African trade by $5 billion a year

However, Nadasen pointed to initiatives by governments and regional alliances such as the African Continental Free Trade Area (AfCFTA) and cross-border infrastructure projects such as the Pan African Payments and Settlement System (PAPSS), as new promising opportunities for pan-African collaboration. and exchange.

See also: From Startups to Institutions: Addressing Cross-Border Issues in Africa to Facilitate Remittance Flows

She added that innovative technologies such as blockchain and cryptocurrency, which have seen massive adoption in the region, will play an important role in the growth of cross-border payments across the continent.

For example, global initiatives like the Dunbar Project, in which the Reserve Bank of South Africa is involved, are exploring how central bank digital currencies (CBDCs) can be used to make currency trading faster and cheaper.

Further reading: Beyond Project Dunbar’s Shared Platform, Unknowns Loom for Central Banks and CBDCs

Finally, Nadasen said that despite being a global leader in mobile money, there is still room for digital innovation in Africa, pointing to high data costs and poor internet infrastructure. as problems that need to be solved to stimulate growth and development across the world. Region.

“Some countries are lagging behind, and significant investments will still need to be made there, but so far mobile money growth has been significant. [highest] in the world.”

You might also like: Blockchain Technology Could Solve Many Challenges in the African Payments Space

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