A new era for digital payments in Africa
The world as “one global village” has never been truer than it is today. This global village keeps growing smaller and becoming more accessible through the steady increase in digital payments innovations and adoption. We are left with a sort of ‘global room’, where commerce and trade can happen seamlessly in a blink, and today, Africa is no longer left out of this worldwide financial reality.
How did we get here?
Not very many years ago, cash was king in African trade. This is because cash is known and trusted, and a person’s status symbol was made evident by pulling out a wad of cash or lugging around a suitcase full of money to handle transactions. Beyond the immense security risk that comes with that, it is an avoidable burden in today’s financial world.
However, in the past five years, more people have gradually begun to embrace digital payments because of the ease, convenience, and speed of transactions, making it a better alternative to the old, traditional cash systems. Even in some rural areas, mobile money operators are finding ways to penetrate these locals to bring as many people as possible out of the unbanked population.
Also, the global pandemic catalysed some brilliantly rapid innovations, particularly in the areas of business and trade. This has made the transition from cash payments to digital payments a necessity. Buyers and sellers in Africa are gradually beginning to adopt contactless methods of transaction, with more e-commerce opportunities springing forth each day. According to Forbes on the impact of COVID-19 on Africa’s commercial space, the number of mobile-money transfers doubled in the week after a lockdown was imposed in March and by late April, users were making 3 million transactions a week, five times the pre-pandemic norm.
Furthermore, the volatile economy in Nigeria, and Africa at large, especially as a result of the pandemic, has spurred many to extend their trading tentacles into the global market. Commerce has evolved into a more demanding and more flexible reality with immense potential and economic opportunities for people who aspire to defy the odds of the grim economic situation. Businesses in the country are digitized now more than ever, in a quest to expand beyond borders and reach potential global customers; and to achieve this, a super-flexible digital payments infrastructure is required to meet the growing demands.
What does this mean for Nigeria and the rest of the continent?
In a bid to survive and preserve economies, Africa has risen to the challenge, and financial inclusion has become a strong demand. Recent research by Better Than Cash Alliance shows that Nigeria, especially, is leading by example in Africa, by making its pension payments, payments to state and local governments, and 61% of its salary and social subsidy payments electronically.
However, there are still several strides to be made in ensuring that true cashless transactions and digital payments permeate through to the digitally hesitant population (such as the people in the lowest economic class, the uneducated, and the senior citizens). By gradually overcoming this challenge through increased innovation and financial inclusion and education, Africans can then compete favourably in global markets and revive their country’s economies.
The idea of ‘going cashless’ is here to stay, and this is reflected in the growing number of mobile money accounts in Africa, which passed the half a billion mark in 2020. In this same year, Africa alone accounted for more than 64% of the value of global mobile money transactions, totalling $767 billion, according to a recent report by Proshare.
With the steady adoption of digital payment methods such as internet banking, mobile banking, Unstructured Supplementary Service Data (USSD), banking cards, Point-of-Sale (POS) payments, and digital wallets; as well as the prevalence of innovative fintech platforms, it is only a matter of time before Cash is no longer king in Nigeria, and Africa. However, despite this significant progress and how the pandemic has successfully reshaped the digital payments landscape, there is still a lot to be done in terms of providing everyone on the continent with access to cutting-edge financial services.
This is why at Unlimint, we are constantly seeking new ways to bridge the gaps in digital payments across regions, and especially between businesses and consumers, to catalyse/stimulate growth for enterprises and impact economies at large. For the past 12 years since our inception, we have worked to bring our vision to fruition, which is to make the financial world of tomorrow closer to businesses here and now. And so far, we have been able to expand our portfolio to provide more than 1000 different payment methods, and develop a solution that gives our clients a 360-degree overview of their financial ecosystems, enabling them to take back control of their finances and scale their business to new heights, both locally and globally.
By providing the right digital payments solutions that offer businesses over 1000 alternative payment methods, enterprises can serve their customers from anywhere in the world, seamlessly and securely, like never before. With solutions like this at hand, Nigeria and Africa are braced for the digital payment needs of tomorrow.
Abimbola Odedeyi –Head, Nigeria -Unlimint, works with stakeholders in the financial services industry in identifying and aggregating local and international alternative payment methods.