With many businesses and people using mobile money technology for daily transactions, it has become a crucial component of the African economy.
For instance, in 2021, the volume of mobile payments on the continent surged by 39 percent to reach $701.4 billion, or about 70 percent of the entire volume globally.
It is important to note the huge influence that mobile payments have had on international trade in Africa. Money can be sent rapidly and cheaply across international borders. This has increased cross-border trade, drawn international brands, and encouraged economic expansion throughout the continent.
According to EBANX’s Beyond Borders report, by 2025 alternative payment methods will be used in at least 70 percent of all online transactions. Digital wallets, mobile money and fast payments will dominate the market in this scenario, with cards accounting for only approximately 30 percent of online transactions. In Botswana, mobile money services available include Smega by BTC, Orange Money by Orange Botswana, Myzaka by Mascom, and Poso Money by Botswana Post.
Mobile money subscriptions have been fluctuating in accordance with the changes in subscription prices. According to a Statistics Botswana report, mobile money subscribers for all service providers combined dropped from 1,811,036 in Q4 2022 to 1,685,072 in Q1 2023, a 7.0 percent decline. This is contrary to the general trend in Africa where due to the increasing penetration of mobile phones and innovations, the mobile money industry is experiencing significant growth with promising prospects.
Examples in Africa include the Nigerian government’s NIIBS Instant Payments initiative, which was introduced in 2011 and has become the most effective payment system. NIIBS generates an annual transaction value of approximately USD 380 billion. In Kenya, they have Pesalink, which is connected to 32 banks, with more than 3 million registered accounts and a cumulative transaction value of almost USD 200 billion. M-Pesa, also originally from Kenya, is the most widely used mobile money app in Africa. It has over 40 million users and is widely used in other African nations such as Tanzania, Ghana, and Egypt.
In Zimbabwe, EcoCash has also grown to be among the most widely used in Africa, with over 10 million users. One of EcoCash’s standout features is its affiliation with several institutions, which enables users to link their mobile money accounts to their bank accounts. EcoCash also provides a range of security mechanisms, including PINs and biometric authentication, to guarantee the security of users’ money.
Mobile money has become a potent tool for payments in Africa, providing a practical, safe, and affordable means to send and receive money. The way people receive financial services has changed because of this technology, which has also contributed to advancing the financial inclusion of the non-banked on the continent. Mobile money is paving new ways to comprehend spending patterns, in addition to making payments easier. As a result, globally B2B and B2C companies are using transaction analytics to enhance customer experiences, create targeted advertising campaigns, and strengthen brand loyalty.
Thus, if your business wishes to explore and grow in Africa’s tremendous digital commerce potential market, you have no choice but to accept the most widely used and efficient alternative payment methods accessible locally and in other nations.
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