Demand for affordable, cross-border payments drives innovation in Africa

Source: Bizcommunity, 03/09/2018

The future of payments ecosystems is taking shape in Africa as the
continent paves the way for innovation that brings together retail,
banking, financial services and mobile technology. It`s being fueled
by a drive for financial inclusion - new ways to bring consumers,
merchants and entrepreneurs into the formal economy.

`A huge advantage is that in Africa, mobile technology is already a
given and a great enabler for payments,` says Hannalie Marsh, general
manager of Wirecard South Africa.

She says there is a great demand in Africa for cross-border payments
and a need to regulate the payment industry on the continent while at
the same time opening it up to include non-banks.

`Across the world, the payments industry is being compelled by
regulation to become more inclusive. Retailers and fintech
organisations, for example, are being encouraged to provide services
historically only associated with banks.

`Traditional banking is expensive and alternatives that keep costs
down have to be found, particularly in developing and emerging
economies,` says Marsh.
To enable higher levels of financial inclusion across Africa, banks
and payments companies must drive solutions allowing small and
informal merchants to accept digital payments at a lower cost...
A consolidated platform

She believes a combination of technology, banking and retail on a
single, consolidated platform, would solve many challenges.

`Already we are seeing a collaboration between some banks and
innovative fintech companies. Banks are just not agile enough to
tackle rapid tech development and a large continent like Africa on
their own. This is one of the reasons retailers have been so
successful in the remittances space �` they have outlets in places in
remote regions that will never see a bank branch.`

`All these parties are fairly protective of their own space but by
contributing what they have �` a wide physical outlet network,
technology and payments systems, for example, they can collaborate.
This way they reach more people and reduce costs. The mobile component
is also a significant factor because of its ubiquity on the
continent,` says Marsh.

She adds that another big drive globally is for a single digital
platform to provide multiple services using the same technology and
infrastructure.

`The minute you can offer multiple services off the same
infrastructure you can reduce costs dramatically. We have the ability
to provide solutions to both individuals and businesses on the same
platform which means we can give a set of diverse services to both
parties.`
The use of mobile devices to make retail and store payments will act
as a driver for financial inclusion of the unbanked in emerging markets...
Learning from Africa

`It`s particularly relevant in African economies. Take the example of
an informal trader: a single system that offers them the ability to
accept and make payments solves not only their payment challenges but
also those of the supplier and customers �` everybody wins. The single
source �` typically accessed by mobile devices �` helps build trust
around payments and innovation can be applied everywhere those
conditions exist.”

Marsh says there is a lot to be learnt from Africa around technology
and innovation and how to overcome difficult environments and situations.

“Just as much as we consume the innovation and expertise we glean from
global colleagues, so we too bring expertise to the rest of the world.
We get to showcase all the things that happen here in Africa which can
seem a daunting place to others, but we are taking some of that to the
global stage through partnerships and by exposing what we do locally.
We are able to develop and improve payment technologies in Africa and
apply that expertise elsewhere in the world,” concludes Marsh.