Business opportunities thrive in Africa, provided we perfect the payment systems
In the dynamic world of commerce, Africa stands out as a continent brimming with opportunities, particularly in the realm of mobile money. As of 2022, West Africa boasts an impressive 1.6 billion registered mobile money accounts, marking a year-on-year growth rate of over 13%.
This surge in mobile money adoption is evident across the continent. For instance, Tanzania, with 44.6% of its population aged 15 and older having a mobile money account as of January 2024, and Ghana, where nearly 60% of the same demographic have a mobile money account, are prime examples.
The continent's economic growth and rapidly increasing young population, with a median age of 20 years, making it home to the world's youngest population, offer a unique opportunity for businesses. The time to invest in Africa is now, as its economic growth and young population promise a vibrant and growing market.
However, the landscape is not without its challenges. In North Africa, stricter financial controls and government policies can make it difficult for companies to enter the market. Meanwhile, the regulatory environment in West Africa is fragmented and varies from one country to another.
Despite these hurdles, the rewards for companies that successfully enter and operate in African markets can be substantial. The potential to capture a significant share of the market and drive long-term growth is immense.
Companies that establish a presence in Africa now and innovate beyond traditional card transactions can capitalise on the continent's rapidly expanding market. By embracing Africa's diversity and strategically tailoring their approaches to meet the specific needs of each region, businesses can unlock Africa's payment potential and secure a strong foothold in one of the world's most promising markets.
Cross-border payment experts in Africa tackle both regulatory and financial complexities, offering options such as alternative payment methods and local currency offerings. Digital resilience is key to retaining customer trust in financial services, and this is particularly important in the rapidly evolving African market.
Key companies with successful mobile money services in Kenya and Tanzania include Safaricom’s M-PESA in Kenya and Tigo Tanzania’s Tigo Pesa. These companies have been innovative, launching cross-border mobile money services linked with M-PESA, MTN, and Airtel across East Africa. Tanzania also developed the government-backed Tanzania Instant Payment System (TIPS) that complements mobile money with real-time bank and mobile wallet transfers.
By 2030, the largest consumer markets in Africa are expected to be Nigeria, Egypt, and South Africa. The digital wallet market in North Africa is projected to grow from approximately $20 million in 2023 to nearly $104 million by 2032. The African mobile money market is forecasted to grow to $3.66 billion by 2033, at a CAGR of 18.32%, driven by expanding adoption, increased cross-border interoperability, and rising transaction limits facilitating larger business payments.
The future of commerce in Africa is being defined, and companies that innovate in the region stand to lead this charge. By navigating the regulatory landscape, embracing Africa's diversity, and focusing on digital resilience, companies can position themselves to capitalise on this unique opportunity.
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