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Beyond the Transaction: Every Transaction Has a Story
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2015 – Emerging Payments’ Big Year in Africa

Financial inclusion is a primary driving force behind the transformation of Africa’s payments landscape, enabling the unbanked majority of Africa’s adults to access affordable, secure financial services. At the same time, governments must also lower the costs and reduce the risks associated with cash – for consumers, merchants and their own administrations.

In 2014, the introduction of MasterPass in South Africa and Mobile Cashier in Egypt is evidence Africa is embracing innovative payment solutions to realise its economic and development potential. Looking ahead at 2015, I anticipate significant movement in the following areas:

Mobile money maturesAfrica growth

Researchers estimate that smartphone penetration in Africa will increase from 17% at the end of 2014 to 34% at the end of 2018 – doubling in just four years. This enables mobile money providers to meet the demand for services more sophisticated than airtime top-ups and person-to-person transfers, already available today. Agriculture supply chain payments, micro-loan disbursements and repayments, and emerging insurance products – some of which are already in pilot – will transform mobile transfer services to mobile financial services.

Convergence drives commerce

As payment technologies evolve, and mobile devices and data become more affordable, the convergence of solutions and platforms means that every device in Africa can become a commerce device – even those owned by consumers without a formal bank account. Contactless transit solutions, e-commerce solutions like the aforementioned MasterPass, and the EcoCash MasterCard debit card are examples of how blurring the lines between payment channels, solutions and devices create payment innovation.

Government programmes boost financial inclusion

Increasingly, Africa’s governments understand the costs and risks of cash, and that cashless payments make their economies more efficient. MasterCard anticipates collaborating with a number of governments to create customised solutions that meet their administrative needs, and increase the financial inclusion of their citizens. One example is the innovative Nigerian eID, a payments-enabled identity card secured with biometrics technology the government is rolling to 13 million Nigerians.

As 2015 welcomes an increasing number of innovative, made-for-market digital payments services and solutions to Africa, the continent will better evolve its markets, formalise retail and overcome the cost, distance, and infrastructure barriers that stifle its emerging economies. It’s an exciting time to work for a payments technology company like MasterCard.