African markets are witnessing an inflection point in payment acceptance, according to new research by Network International.
A white paper on “Payment Acceptance in Africa” identified an inflection point of payment acceptance growth in Africa, highlighting key trends and multiple opportunities for the banking sector.
“The Payment Acceptance in Africa report indicates that Africa’s banking sector is now at a crossroads, a moment in history where financial services have an opportunity to transform how they interact with the unbanked population, how they engage with SMEs and how they can support small-scale businesses in high-employment sectors like agriculture where there are enormous opportunities,” the paper noted.
The amount of money processed through Point of Sale (POS) devices environments remains only 5% of the gross domestic product (GDP) in Africa, compared to over 30% in some countries, Andrew Key, Managing Director Africa at Network International, commented.
The research further suggests a number of opportunities including: transforming the profitability of Payment Acceptance through lower costs, new revenue lines and greater scale; creating a halo effect on the issuing side of the business by creating more usage opportunities and the potential to drive customer loyalty as more merchants equate to more opportunities for the use of issuing products, boosting transaction-driven revenue.
Other suggestions are feeding the flow of liabilities and hard currency to a bank, transforming how personal customers transact with their bank and encouraging a deeper engagement with a bank’s brand, supporting the growth of efficient lending to both companies and individuals, and creating a new delivery channel through flexible technology enabling additional services.
Bank accounts are now held by 41% of adults, POS devices up 26% a year, and transactions per card increasing by 61% annually, as per the research paper that is based on the research of nine African markets.
The pace of growth in the adoption of digital payments and bank accounts provides financial services providers with brand new opportunities to roll out new financial technology (FinTech) solutions, credit facilities for small and medium enterprises (SMEs) and retail banking services to the world’s fast-growing population, according to Network International.