Africa’s Immediate Payment Services (IPS) have grown significantly during the past five years, with values and transaction volumes rising 39% and 37%, respectively. This increase is indicative of a larger trend in the continent’s embrace of digital finance, which is being driven by regulatory changes, mobile technology, and increased financial inclusion programs. In sub-Saharan Africa, for instance, mobile money transactions reached $277 billion in 2022, a 22% rise from the previous year. Launched by major telecom companies like MTN and Airtel, Nigeria’s Payment Service Banks have greatly increased financial accessibility.
These systems provide peer-to-peer transfers, international remittances, and merchant payments; certain countries have the largest shares of merchant payments worldwide. As part of the African Continental Free Trade Agreement (AfCFTA), the Pan-African Payment and Settlement System (PAPSS) promotes the efficiency of cross-border transactions. Because of these changes, financial institutions are more optimistic; 72% of them believe PAPSS would speed up economic integration. This expansion shows that Africa has the ability to lead the world in fintech, despite ongoing obstacles like expensive prices and inadequate infrastructure.
Establishment of PSBs in Nigeria has also fuelled this rise.
Improved digital payment methods are changing the financial scene and giving millions of people better access to and involvement in the economy. Due to the increasing adoption of digital payment solutions by the continent, which has been fuelled by financial innovation, mobile technology, and regulatory backing, the volume and value of transactions conducted through Immediate Payment Service (IPS) in Africa have increased. While transaction values have grown by 39% over the last five years, transaction volumes have increased by 37%. The establishment of Payment Service Banks (PSBs) in Nigeria, which provided financial services to underbanked populations through telecom networks like MTN and Airtel, has been one initiative that has fuelled this rise.
Mobile money systems have also been crucial, particularly in areas like West Africa, where total transaction values in 2022 reached $277 billion, a 22% year-over-year rise. The foundation of these systems consists of services like peer-to-peer transactions, international remittances, and merchant payments. With monthly remittance values reaching $640 million, West Africa, for example, is responsible for more than one-third of all merchant payments made using mobile money worldwide. The implementation of the Pan-African Payment and Settlement System (PAPSS) coincides with this increase as well.
The systems enable quick, safe, and inexpensive transactions.
More so, the PAPSS rollout is intended to make cross-border local currency payments easier. These technologies are intended to lower transaction costs, increase efficiency, and strengthen regional financial integration when combined with ongoing initiatives within the African Continental Free Trade Area (AfCFTA). Even if there are still issues like expensive Infrastructure and dispersed regulations, IPS’s expansion shows how important Africa is becoming to the global digital payments system. In recent years, Africa’s Immediate Payment Systems (IPS) have experienced tremendous expansion and innovation, drastically altering the continent’s financial environment.
Regulatory developments, a strong focus for financial inclusion, and Mobile Technology have all played a significant role in the development of IPS. Particularly important in areas with restricted access to traditional financial services, these systems enable quick, safe, and inexpensive transactions. The establishment of Payment Service Banks (PSBs) in nations such as Nigeria has played a significant role in propelling this transformation. Through the use of telecommunications infrastructure and mobile networks, PSBs have made digital financial services accessible to millions of previously underserved individuals.
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In Nigeria, for instance, PSBs like MTN’s MoMo and Airtel’s SmartCash have transformed mobile money services by enabling merchant transactions, bill payments, and peer-to-peer transfers—all of which were previously restricted to the official banking industry. These developments empower businesses and consumers and make digital financial services available to millions of people. They also make economic transactions easier. With IPS’s continued development and expansion, Africa’s Digital Economy is expected to grow even faster, hastening financial inclusion across the continent.