top of page

Africa is Innovating Payments...Again!

10/12/22 Connor Sullivan

There is a payment revolution occurring on the continent. With over $40B in potential revenue up for grabs, global and local players are investing in Africa and that is good thing for the population.

When Safaricom launched M-Pesa in 2007, they jumpstarted the mobile first payments ecosystem in a region that had been lagging in legacy payments infrastructure. As smartphones and data plans have become accessible to almost everyone, card networks, crypto exchanges and mobile operator are enjoying a new wave of innovation. According to a new McKinsey study, technology is enabling this advance.

"As technology has advanced, so too has innovation. Consumers in Africa continue to benefit from an increase in the proliferation of alternative payment methods across the continent, offered by local and international fintech players and telecom companies. According to GSMA, globally registered mobile-money accounts stood at 1.2 billion in 2020, roughly equal to the population of the continent, with more than $2 billion in daily processed transactions, equivalent to more than 40 percent of the GDP of sub-Saharan Africa.14 International remittances terminating in mobile-money wallets grew by 65 percent year over year in 2020 to around $1 billion, with no signs of slowing.15 Digital wallets that are linked to a variety of payment methods, including cards, accounts, and mobile money, also are growing in availability and adoption. Card-linked digital wallets, for instance, are a significant driver of growth in issuance and usage of cards, including virtual cards.

New and innovative technologies are also enabling easier consumer and merchant transactions and new business models and offerings. For instance, integrated universal QR codes, including those sponsored or built by central banks or similar institutions, are helping to reduce complexity as the number of payment methods grows. For example, Ghana’s Quick Response service (GHQR) enables payments from bank accounts, mobile money, and cards, and Nigeria has launched the NQR, a similar solution. Meanwhile, interoperability between competing mobile wallets has been achieved in most countries." 1

Fintechs like Yellow Card and Data Mynt are partnering to bring cryptocurrency to consumers and retailers. Yellow Card has made the on and off-ramp of cryptocurrencies in over 15 counties in Africa simple and straightforward. Now, Data Mynt is making it easier to use digital assets when buying and selling goods and services. Mobile point of sale apps empower the sidewalk vendor as well as the large department store to launch the solution quickly and inexpensively.

Companies like Yellow Card and Data Mynt have gained the confidence of the venture capitalists as demonstrated by Yellow Card's recent $40M Series B raise. In 2021, more than 60 percent of all venture money above $200,000 that flowed into the continent was raised by African fintech firms. Twenty-one fundraising rounds above $50 million were recorded that year, almost ten times more than the year before. In addition, 2021 saw the highest annual growth ever recorded, at more than 264 percent—3.6 times more than the previous year. 2

Maybe it's time your you to rethink the payment landscape of Africa.... and learn from the innovators.


1 The future of payments in Africa

Copyright © 2022 McKinsey & Company. All rights reserved.

2 2021 Africa Tech Venture Capital, Partech, 2022.


Featured Posts
Recent Posts
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
bottom of page