– AfricaNenda, the United Nations Economic Commission for Africa (UN ECA) and the World Bank have released the State of Instant and Inclusive Payment Systems in Africa report (SIIPS – Africa).
The report builds on extensive consultations with industry leaders and experts in digital financial services as well as MSMEs and consumers across the continent.
It provides a detailed landscape of Instant Payment Systems (IPS) in Africa and highlights ways in which they can become more inclusive to leave no African behind in the digital era.
Inclusive instant payment systems allow people to use any systems run by financial service providers to make payments immediately, at a low-cost, to anyone and at any time.
They are also a catalyst for financial inclusion as they contribute to accelerating low‑income consumers’ access to digital payments solutions and hence to the formal economy.
The SIIPS – Africa report 2022 shows that IPS are growing rapidly, with 29 systems having gone live on the continent in the past decade.
Despite all the increasing interest in these IPS, only a few are showing signs of potential to reach a state of mature inclusivity due to regulatory challenges, lack of data transparency and high costs for both payment system providers and end-users.
Those challenges call for a collaborative effort between public and private stakeholders to ensure open access to shared payment infrastructure, healthy competition and access a range of services that meet consumers’ needs.
The report also underlines that IPS need to take into account the lived reality of consumers more deliberately in order to address users’ needs and enable them to access various payment services through multiple channels, and so trigger a more regular usage of digital payments.
“Though IPS can play a pivotal role in creating universal access to financial services for all Africans, much remains to be done to understand how those systems can better reach and benefit underserved populations. AfricaNenda is thriving to bring together leading experts and stakeholders from across the continent to drive and accelerate the development of cutting-edge payment systems. The report’s insights will contribute to unpack the digital payment system landscape and help stakeholders design and implement IPS that better serve all Africans.” – Robert Ochola, CEO AfricaNenda.
“IPS is critical in the successful implementation of the African Free Continental Trade Area (AfCFTA) Agreement by providing instant and inclusive payment solutions for the majority of businesses on the continent, including SMEs. In making this a reality, ECA will continue to support African Member States leverage digital technologies for their
socio-economic development. ECA reaffirms its commitment to partnering with AfricaNenda and other stakeholders to ensure financial inclusion across the continent” Mactar Seck, Chief of Technology and Innovation Section Africa is one of the fastest growing regions globally, with strong economic growth and a rapidly expanding middle class.
The continent is also set to benefit from an increased focus on infrastructure development by African governments and multilateral institutions.
While this is expected to drive up incomes, there are concerns that more than 350 million Africans will be left behind due to lack of access to formal financial services.
The SIIPS – Africa report will be released annually. It will drive the AfricaNenda Community of Practice and will allow us to better track and support reforms and innovations to accelerate universal access to financial services for all Africans.