Enabling financial services in Africa
Digital wallets changing the world of banking
The GSMA 2023 State of the Industry Report on Mobile Money underscores the mainstream adoption of mobile money in various African nations.Since 2022, over 184 million people in Africa have embraced mobile money, with Sub-Saharan Africa boasting 763 million registered accounts, representing almost half of the global 1.6 billion users. Transaction values in the region surged by 22%, reaching U$832 billion.
While Kenya, Nigeria, and Ethiopia dominate the mobile money landscape, South Africa has experienced slower growth due to a focus on bank partnerships and regulatory complexities. Despite the regional commitment, South Africa maintains a bank-led model for mobile money, a situation that may change with the anticipated SARB NPS 2025 Vision.
Regulatory constraints and issues of trust remain barriers to widespread adoption. Operators must establish trust as users transition from physical cash to digital transactions. Financial inclusion efforts should prioritise making financial products accessible to the broader population, emphasising the role of operators in decision-making.
Building trust
Successful mobile money operators recognise the need to position wallets as stores of value, supported by physical touchpoints and agent networks. Trust-building measures are crucial, particularly given that two-thirds of transactions in SSA involve cashing in or out. Educating users on wallet versatility, from utility payments to education expenses, is essential for sustained growth.
Digital wallets offer benefits for both users and merchants, revolutionising economic transactions. Real-time transactions eliminate the need for traditional Point-of-Sale devices, providing merchants with instant access to funds. This shift to digital transactions enhances transparency, enabling fintechs and banks to offer credit and savings solutions.
The World Bank acknowledges the multiplier effect of financial inclusion, contributing to a country's economic development and stability. Fintechs like Mukuru play a vital role in driving financial solutions across diverse customer bases. Despite regulatory challenges, a shifting sentiment among regulators is expected to result in a more vibrant ecosystem, offering relevant financial solutions and broadening society's participation in their financial journey. – Distributed on behalf of APO.
*Juan Seco is the Chief Growth Officer and East Africa MD of Mukuru (https://www.Mukuru.com).
** Opinion pieces and letters by the public do not necessarily reflect the opinion of the editorial team. The editors reserve the right to abridge original texts. All newspapers of Namibia Media Holdings adhere to the Code of Ethics for Namibian Media, a code established jointly with the Media Ombudsman.
*** Mukuru is not yet available in Namibia.