Accelerated by the advent of the COVID-19 pandemic, which has forced consumers to shift their behaviours and adopt more technology to assist their day-to-day lives, including finances, digital payment growth in Sub-Saharan Africa, according to Visa, can be driven by innovation, partnership, and co-creation.
According to Aida Diarra, Senior Vice President, Head of Sub-Saharan Africa at Visa, innovation and technological advances are bringing exciting opportunities for financial inclusion to the fore. She believes the last decade has seen enormous growth in digital technology, including payments.
“Technology is now a tool to leapfrog over old processes, systems, and protocols for the benefit of everyday consumers,” Diarra said.
As a result, she said the payments segment has grown rapidly in Sub Saharan Africa, mainly due to the high demand for financial inclusion.
“Today Visa, the world leader in digital payments, has become the connective tissue to enable new payment and commerce experiences by co-creating with all players in the payments sector – including fintech, neobanks and wallets – to enable new payment experiences across the region. We have always been an enabler of the invention and have constantly innovated to meet market needs over the years — from credit, debit and prepaid to mobile and IoT – to enable new payment experiences across the region.”
Read also: Visa highlights innovation capabilities for financial inclusion
Explaining further, Diarra said Visa’s business and technology strategies enabled it to become a leader in electronic payments over the last six decades.
Despite Visa’s great success, an estimated $17 trillion of cash and checks are still in use globally, and nearly 2 billion adults lack access to formal financial services, providing huge opportunities for Visa and the greater industry to rally around standards (e.g., QR, eCom/mCom) and capabilities that will broaden access to electronic payments.
According to the Global Innovation Index, regional divides persist and with Sub Saharan Africa, the region is characterized by high performers like South Africa and Mauritius who rank in the top 60, while most of the region ranks below 100.
Visa’s approach to innovation in the 21st century is anchored in a belief that paying with Visa in the digital world should be just as simple as when a consumer pays with Visa in the physical world. It should also be just as secure, rewarding, and convenient, the San Francisco-based company said.
“With commerce becoming increasingly digital, there is a greater impetus for Visa to innovate to keep our system secure for everyone. Every Visa payment, for example, is secured by our sophisticated anti-fraud detection systems that apply the latest in machine learning and artificial intelligence,” Diarra said.
According to her, Visa has pioneered the use of sophisticated machine learning systems to reduce fraud on its network over a decade ago, and in the years since, Visa has evolved its predictive analytics to incorporate new data sources and new AI technologies.
In a fraction of a second, Visa analyses up to 500 pieces of data to protect account holders and merchants by catching fraud before it happens, she said.
Data analyzed from the debit and credit card company revealed that the restrictions on movement and increased wariness of handling physical cash caused by the COVID-19 pandemic helped lift Sub-Saharan mobile money transaction volumes 23 percent to $490 billion in 2020, greater than the GDP of Nigeria, the region’s biggest economy.
It also explained that leapfrog markets like Kenya have one of the highest mobile-money penetration rates in the world (mobile money is 54x bigger than card payments).
What further compels Visa’s innovation strategy, according to the company, is a very large opportunity to accelerate the adoption of digital payments globally. Over the last several years, Visa said it has fundamentally evolved both its platforms and how it works with partners and clients to encourage a broadening of the commerce ecosystem.
“Our focus has remained the same: to provide our clients and partners with access to our network, products, tools and expertise to enable their growth and success. In addition, our collaborations with a broad range of partners to co-create market-ready payment solutions have been a key driver in the enhancement of financial inclusion across Sub-Saharan Africa,” Visa said.
Some of its latest partnerships are leveraging the power of mobile as an access point to financial inclusion, including a partnership to develop products that will expand access to digital payments at scale for over 30 million mobile money customers.
“We are also driving access for small businesses through the launches of tap to phone and an exciting pilot that will serve as a solution to help small business owners digitize their business, covering payments, point of sale and access to credit, via a mobile device,” Diarra said.
To foster real inclusion, the Senior Vice President and Head of Sub-Saharan Africa at Visa explained that there is a need for tangible, customer-centric solutions that, through innovation and design centre capabilities, all partners in the financial services industry will have a chance to engage with key trends and will be able to identify where the gaps and
opportunities are.
“We are always looking to partner with companies at the leading edge of enhancing financial inclusion. As we continue to evolve as a company and a brand, technology will continue to be our great enabler, helping us achieve our vision of being the best way to pay and be paid, for everyone, everywhere,’ she said.
