How digital access is transforming financial inclusion in Africa




In the convenience economy, digital payment solutions are central to businesses providing a service that is quick and seamless. In Africa, digital technologies are not only improving convenience but they’re driving financial inclusion, allowing people to transact, bank, invest and expand their financial knowledge, using nothing more than a mobile device.

Traditionally, retailers have been slower to adopt new payment technologies than e-commerce retailers and small businesses might have been. But the advent of COVID-19 and its associated lockdowns accelerated the pace of change, and retailers have had to roll out contactless payments, delivery apps, and online e-commerce offerings at an unprecedented speed.

According to the GMSA State of the Industry Report on Mobile Money  for 2022, there were 184 million active mobile money accounts in Africa in 2021, which completed over 36 billion transactions, valued at more than $700 billion.

While the growth in payments and e-commerce have been nothing short of stellar- driven in large part by the pandemic- fintech is driving major changes throughout the entire banking ecosystem.

Payments anywhere:

The country in which you live should not have any effect on your ability to make a payment. African consumers, who number more than one billion people, have a growing need for digital services and financial technology platforms. Some of the most important requirements include the ability to stream media, trade across borders, and send money to family members back home. The interoperability of digital financial services is more important than ever in today’s interconnected society.

For many years, fintech companies such as MFS Africa have been solving cross-border payments issues on the continent, enhancing the capacity of African businesses and people to send and receive funds across geographical obstacles.

“Our guiding principle is that African consumers and businesses should be able to pay for anything, both offline and online. We’ve always known that in order to really eliminate borders, we needed to connect mobile money to the rest of the world; introducing card capabilities into our network seems to be the most effective means to do it. MFS Africa’s recent acquisition of GTP is assisting us in reaching this goal” says Rashi Gupta, Chief Operating Officer at MFS Africa.

Making payment technology accessible and safe:

Google has recently launched its Google Wallet in South Africa- creating a safer, simpler and more helpful experience when transacting. “Access to technology is vital for economic prosperity as millions of people use their mobile devices daily to tap and pay at stores, pay for public transportation and to utilise a variety of passes. At Google, we have learned that great things happen when technology works for everyone. By including everyone – a dynamic ecosystem of manufacturers, developers and users – we want to make digital wallets accessible to everyone through fast, secure access to their everyday essentials,” says Google South Africa Country Director, Alistair Mokoena.

The Google Wallet allows Android users to safely make contactless payments, and store other useful items like loyalty cards and boarding passes.

“Security and privacy are built into every part of Google Wallet, making payments safer and allowing people to transact seamlessly and with confidence throughout the day. This will allow users to make transactions using a virtual card number (a token),” Mokoena adds.

Beyond payments:

The digital payments sector has seen massive growth, but as this area starts to mature and saturate on the continent, we’re starting to see the emergence of other digital technologies to help people save, invest and take out loans, says Tony Mallam, MD of micro-investment platform upnup.

“Micro-savings and investment products, which allow consumers to put away a small amount of money, are perfectly suited to the South African context where savings rates are low, and the cost of living means that not everyone can put away set amounts of money each month, “says Mallam.

“Africa’s fintech sector has the potential to produce answers to many problems that South Africans face, whether it be our low savings rate or improving financial inclusion. And financial inclusion goes way beyond just having a bank account, it’s about being able to save for your future, take out a loan to fund your child’s education or to start a business, or even simply insuring your belongings. Most importantly though, it is about allowing people to access their potential, accumulate wealth and change their circumstances, which are pretty compelling reasons to applaud the work and the wins in the fintech industry,” he says.

Financial inclusion starts with financial literacy:

A 2021 report by Momentum and Unisa found that many South Africans are “financially unwell” because of poor financial decisions or a lack of financial literacy, and those households who make use of financial expertise, and stay on top of their financial planning, are more likely to experience better financial outcomes.  Few people have access to a financial advisor or the resources to learn more about how to manage their finances, but technology has the power to bridge this gap, says Glenn Gillis, CEO of Sea Monster.

“Apps and games are changing the face of financial education by making it fun and accessible for a diverse audience. Animation, games and gamification are especially well suited to financial literacy education because they are accessible to a diverse audience and can easily be adapted for different ages, languages, cultures and communities. They also allow people to learn in a way where they don’t feel judged and can be designed for low bandwidth environments,” Gillis says.

“Evidence suggests that people with financial savvy are more likely to accumulate wealth because they make informed decisions about spending and retirement. We’ve already seen how games have been used in South Africa to teach people various financial skills like compound interest, bond repayments, saving for their retirement, how to balance expenses and entrepreneurship and there is still a lot more scope to use these tools to help people change their lives,” Gillis concludes.

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