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Digital payment systems surge across Africa

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By Mercy Kelani

By 2026, digital commerce markets in Africa & Latin America would exceed $1trn.

Within a stretch of under eight years, the infiltration of digital payment systems has surged exponentially in Nigeria and numerous other nations across Africa, expanding from a mere 23 percent to a remarkable 46 percent. According to a comprehensive research conducted by EBANX named ‘Beyond Borders,’ it has been confirmed that this phenomenon has persistently stimulated the expansion of online business. The global digital market is being propelled by the emergence of online transactions accompanied by instant payments, transfers, and various alternative payment methods, as disclosed by the digital payments company.

This growth is attributed to the increasing participation of countries such as Brazil, India, Kenya, and Nigeria in the digital economy. The report highlighted the continued dominance of cards in the realm of digital payments, while also pointing out that a staggering number of new consumers (34 million) are expected to adopt digital payment methods, with India being the key market for this significant growth, according to the firm’s observations. By 2026, it was predicted that the digital commerce markets in Africa and Latin America would exceed a combined value of $1 trillion. This projection emphasized the commitment to include these regions in the overall consumer growth, ensuring they do not get left behind.

Emerging economies embrace digitalization with open arms.

Paula Bellizia, the President of Global Payments at EBANX, pointed out a compelling explanation for this phenomenon: ascending economies thrive due to their youthful and expanding populace, which sets them apart from more developed areas. Moreover, aside from the demographic and economic factors, these emerging economies embrace digitalization with open arms, reaping tremendous benefits as a result. Industries have been experiencing significant disruption caused by the advent of the digital revolution. This disruption has created various avenues for local and global players to explore. These avenues encompass diverse fields such as software-as-a-service (SaaS), online advertising, business-to-business (B2B) online trade, gaming, streaming services, social media platforms, and electronic commerce.

Amidst this transformative era, payments have played an integral role in facilitating and fuelling this growth. The research findings shed light on the fact that in established markets such as the U.S. and Europe, digital commerce is experiencing a steady growth rate of either 13 percent or 12 percent on an annual basis. However, in emerging economies, this growth is occurring at a considerably faster pace of 20 percent. Africa is poised to emerge as a pivotal hub for digital commerce and payments, given its early embrace of digital transactions and the projected surge in its adult population, which is set to reach one billion by 2030. This continent holds immense potential for the rapid expansion of digital technology in the field of commerce and payments.

Africa is now at the brink of its next significant advancement.

Furthermore, Africa is approaching a major breakthrough in the realm of digital commerce. With a remarkable shift from 23% to 46% in digital payment adoption across numerous countries in under eight years, the firm confidently announces that Africa is now at the brink of its next significant advancement. This momentum is largely attributed to the widespread usage of mobile phones and the remarkable adaptability of local payment alternatives to the online platform. An exemplary case is mobile money, which has attained near universal penetration in countries such as Kenya.

The firm made an observation about the online purchasing behaviour in different countries, specifically mentioning Kenya and India. They pointed out that a significant number of businesses in Kenya (42%) and India (63%) are currently engaging in online transactions. In accordance with Capgemini’s findings, a significant majority of approximately 70% of B2B transactions are currently conducted in a largely manual fashion, despite the projected exponential growth in online B2B payments. These projections indicate that by 2027, the markets in LatAm, Africa, and Apac will collectively represent 40% of the overall value of such online transactions. This suggests a pressing need for more streamlined and efficient processes to bridge this significant gap.

Related Article: Enabling Financial Inclusion in Nigeria

In Nigeria, there has been an upward trend in the adoption of digital payment methods. Recent data from the Nigeria Inter-Bank Settlement System (NIBSS) reveals that in March 2023, Nigerians utilized electronic gateways a staggering 1.35 billion times. This figure showcases a notable increase of 448.54 million instances compared to the previous month of February 2023, when digital transactions were recorded at 901.46 million times. In the first quarter of 2023, there was a significant increase in cashless transactions, soaring by 44.84 percent to a total of ₦126.73tn, as opposed to the ₦87.49tn recorded during the same period in 2022.

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29 days ago

Digital payment systems surge across Africa. – By 2026, digital commerce markets in Africa & Latin America would exceed $1trn.Express your point of view.

Adeoye Adegoke
29 days ago

The surge in digital payment systems across Africa is a game-changer for economic growth and financial inclusion. The projected growth of digital commerce markets in Africa and Latin America exceeding $1 trillion by 2026 is truly remarkable.
Digital payment systems provide convenience, security, and accessibility, making financial transactions easier for individuals and businesses alike. This surge in digital commerce opens up new opportunities for entrepreneurship, job creation, and economic development in these regions.
Moreover, the adoption of digital payment systems can help bridge the financial inclusion gap by providing access to financial services for previously underserved populations. This can empower individuals and small businesses, enabling them to participate more fully in the formal economy and unlock their potential.
It’s exciting to see the potential for innovation and growth in the digital commerce space. As technology continues to advance and digital infrastructure improves, the opportunities for businesses and individuals to thrive in this digital era are immense.
I’m looking forward to witnessing the positive impact of this digital revolution on Africa and Latin America’s economies and the lives of people across these regions. It’s an exciting time for digital commerce, and I can’t wait to see what the future holds!

29 days ago

In Africa, the use of digital payment systems is growing. South America and Africa would have more than $1 trillion in digital commerce by 2026. Thanks to advancements in technology, payment systems have become more popular throughout Africa. If nothing else, it indicates that our commercial performance is improving.

29 days ago

The rise of electronic payment methods throughout Africa is revolutionary. It gives people and companies a plethora of options to engage in the digital economy. possibilities for expansion and innovation in the field of digital commerce. The prospects for organizations and individuals to prosper in this digital era are increasing as technology keeps developing and digital infrastructure gets better.

27 days ago

The rise in digital payments across Africa reflects our continent’s embrace of technology for economic growth. It’s encouraging to witness the adoption of digital alternatives, especially in Nigeria, where electronic transactions are significantly increasing. This shift holds immense potential for progress, and as Nigerians, we look forward to further advancements in digital commerce, contributing to our nation’s economic development.