There will soon be more than one billion users of mobile handsets in Africa. By 2025, it is estimated that 90% of adults will have and use mobile phones. This is part of a transformative change that is currently taking place across the continent which will make Africa the innovation center in the world that will provide simple solutions for simple people. This transformation also promises to see a huge chance for economic empowerment. This in turn means more customers looking for deeper engagement in the fast expanding world of mobile payments – a major success in Africa’s development space.
One unavoidable matter in today’s society is the impact that the mobile payment industry has made to people from all walks of life. A cashless economy is a continuous journey with Kenya is the poster child of financial inclusion thanks to innovations like M-Pesa. With a whole household living on a budget of under 76 dollars, there is the need to bring more value to customers through painless and almost cost-free financial inclusion solutions. Mobile money is a more secure and transparent method of money transfer that traditional alternatives making it the go-to empowerment solution.
Although the Africa mobile payment systems markets are booming and some as M-Pesa already regarded as Africa’s success, there remains a significant need for improvement in areas such as security, partnerships with Telco’s and creating even more opportunities of providing financial access to consumers.
Yesterday, the Financial Times Payments Innovation Summit brought together over 250 business leaders from various mobile and financial interest groups under one roof to explore the challenges and possible opportunities integral to these developments. Some of the key issues discussed include:
- Africa’s mobile payment trends and what they mean for next generation entrepreneurs
M-PESA has been regarded as a combination of a well-planned and implemented product innovation, which has been more than useful for both consumers and businesses. SMEs all over the country that use the service praise it for its speed and low cost of the financial transactions. In Nigeria, it is estimated that there are over 150 million phones currently in use.
Safaricom Limited CEO Bob Collymore said that at the moment, M-Pesa is at the tipping point of mobile payments and it is at the center of also offering other entrepreneurial opportunities and stimulating development. Through mobile money, new customers in difficult to reach geographic areas can be reached and there is the integration services and product innovations for many businesses in the country. This will be the trend in mobile money innovation creation in supporting SMEs for their effort in innovating new products for a well-functioning ecosystem of services, intended for the local people.
- Digital banking innovation
Africa is ready for mobile payments innovation. As much as the evidence can be seen from banks in Africa making the much-needed banking move, most countries haven’t yet adopted the system. However, key examples from banks like KCB who are making banking much more efficient especially to their wider customer base that is mostly made up of millennials who prefer transacting from their mobile phones.
- Partnerships with Telcos
Telcos are vital partners in the construction of the mobile banking system. For organizations to survive and thrive, these partnerships should be made on a need based value to achieving a common goal which is transforming the lives of their customers. According to KCB Group Managing Director, Joshua Oigara, organizations need to exist beyond making profits. The focus shouldn’t be on the next financial quarter’s results or the 2-5 year plan that a conglomerate has; the focus should be for a company/organization to still bring substantial value to customers 20 years to come. Until we shift this mentality in innovation, Africa shall never drive innovation.
Bob Collymore, Safaricom’s CEO, also announced that the company was increasing M-Pesa kadogo’s limit from Kshs 100 to 200 for the Lipa na M-Pesa Buy Goods Option. This means that for all Buy Goods payment transactions of Kshs 200 and below, the merchant will not be charged. This is in line with the company’s effort to boost the attractiveness of the Lipa na M-Pesa platform to accommodate more SMEs and small businesses.
