Digital payment systems in Africa have experienced remarkable growth over the past five years, with transaction volumes rising by 37%, signaling a major shift in the continent’s financial landscape.
This shift is outlined in the 2024 State of Inclusive Instant Payment Systems In Africa (SIIPS) Report, launched this week in Accra, Ghana.
According to the report, there are now 31 operational Instant Payment Systems (IPS) across 26 African countries. Additionally, 27 more nations are preparing to launch similar systems.
These developments highlight the growing trend toward cashless transactions and digital payments across the continent, with more countries embracing modern financial technologies.
Dr. Robert Ochola, Chief Executive Officer of AfricaNenda, emphasized the importance of this transformation for Africa’s financial future. “AfricaNenda and its partners are calling for a collective push to expand IPS and deliver solutions that cater to every citizen, particularly those in rural and underserved areas,” he said. “The goal is to ensure universal financial inclusion by 2030.”
Despite the significant progress, challenges remain in achieving full financial inclusion, particularly for women and other vulnerable groups. These groups often face barriers such as fraud concerns and limited recourse mechanisms, which can make digital payments feel unsafe or inaccessible.
Jean Pesme, Global Director of Finance at the World Bank, spoke to the transformative power of IPS, but acknowledged the need for further efforts. “Access to safe, low-cost, and efficient digital payments can transform lives, close the gender finance gap, and foster resilience,” he said. “While progress is remarkable, more needs to be done through fintech promotion and private sector involvement.”
The report also noted a 39% increase in the value of IPS transactions, further demonstrating the growing importance of digital payment platforms across Africa. However, the report stressed the need for more robust systems to address security concerns and ensure network reliability.
One of the key areas of focus for the report is the lack of adequate recourse mechanisms, especially for women who are often the most vulnerable users of digital payment platforms. With fraud and privacy concerns being major obstacles, ensuring safe and reliable systems is critical for achieving financial inclusion.
Sabine Mensah, Deputy Chief Executive Officer of AfricaNenda, spoke on the need for regulators in the financial space to improve data transparency. “We need to work together to create a system where all players in the digital payments ecosystem are accountable and transparent,” Mensah said.
The report calls for accelerated innovation in fintech licensing, universal IPS adoption, and improvements to cross-border payment systems. These efforts aim to create a more inclusive and interconnected digital payment infrastructure across the continent.
The rapid growth of digital payments in Africa reflects the increasing demand for faster, more efficient financial services, particularly in light of the continent’s young and rapidly expanding population.
However, the report also highlighted the need for greater efforts to ensure that the benefits of this growth reach everyone, including marginalized and underserved groups.
While financial inclusion has improved, significant gaps remain. Women, in particular, are disproportionately affected by barriers to digital payments. A lack of access to mobile phones, low literacy levels, and concerns about fraud are some of the key issues preventing women from fully participating in digital financial services.
The report calls for a more inclusive approach to digital financial services, with a focus on addressing these gender disparities. It also stresses the importance of education and awareness campaigns to ensure that people from all walks of life can confidently use digital payment platforms.
Africa’s push towards digital payments is not just about technology, but about creating opportunities for economic growth and development. By making financial services more accessible, particularly in rural and underserved areas, digital payment systems can help empower individuals and businesses alike.
However, the challenges facing the industry are not to be underestimated. As more people move towards digital payments, ensuring that these systems are secure, reliable, and inclusive will be key to their long-term success.
The report’s call for enhanced data transparency, improved fintech licensing, and universal adoption of IPS is aimed at creating a more cohesive and efficient digital payment system across the continent.
Dr. Ochola’s call for a collective push from all stakeholders, including governments, regulators, and private sector players, is critical for driving the continent closer to the goal of universal financial inclusion by 2030.
