Consumer Protection for Instant and Inclusive Payment System (IIPS) in Africa: Challenges and Opportunities

Categories : Blog


Author: Digital Frontiers Institute

In the rapidly evolving landscape of digital payments, Instant and Inclusive Payment Systems (IIPS) are emerging as a cornerstone for economic growth and financial inclusion in Africa. The State of Inclusive Instant Payment System (SIIPS) in Africa 2023 report by AfricaNenda, in partnership with the World Bank and United Nations Economic Commission for Africa (UNECA) highlights the critical need for a conducive policy environment that fosters consumer protection and data privacy through a principles-based regulatory framework.

The Need for Digital Public Infrastructure

For IIPS to become digital public infrastructure, it is imperative to establish a regulatory framework that is both adaptive and robust. This involves moving towards risk-based supervision and ensuring that consumer protection provisions are consistent across complaint and dispute resolution processes, as well as disclosure and transparency.

Building Trust and Consumer Capability

Trust is the bedrock of any financial system. To build and retain consumer trust, IIPS must incorporate effective recourse mechanisms and consumer protection that can adapt to market dynamics. This includes everything from simplified rules to complex, centralised real-time analytics. Moreover, enhancing consumer capability and awareness through targeted education initiatives is crucial, particularly for vulnerable groups like women and the elderly.

Harmonising PSP Operations and Data Regulations

Payment Service Providers (PSPs) face a myriad of challenges due to fragmented consumer protection laws and data-related regulations. Harmonisation can simplify reporting and operational requirements at the regional level, ensuring that customer disputes are handled appropriately, and transactions have equal protection, irrespective of origin.

Market and Consumer Trends

The SIIPS in Africa 2023 report identifies several market and consumer trends that are shaping the future of IIPS:

  • Regulations are being revised to encourage innovation and strengthen consumer protection.
  • Consumers are becoming more aware of fraud and cybercrime risks.
  • Price sensitivity remains a significant factor for end-users.
  • Smartphone adoption is on the rise, but data access lags behind.

Regulatory Considerations for Advancing Inclusive IPS

Regulators play a pivotal role in advancing inclusive IPS. They must foster innovation and coordination to build inclusive national payment ecosystems. This includes risk-based and harmonised licensing of PSPs, network upgrades, sustained roll-out of agent networks, and smartphone distribution to increase access channels.

Consumer Protection Guidelines for IPS Participants

The report provides Examples from Ghana, Malawi, and Nigeria to illustrate the diverse approaches to consumer protection within IIPS. From the Ghana Interbank Payment and Settlement Systems Limited (GhIPSS) adhering to the Bank of Ghana’s recourse requirements to Natswitch Ltd in Malawi developing detailed dispute resolution rules, these guidelines serve as benchmarks for ensuring consumer rights are safeguarded.

In conclusion, the AfricaNenda’s the SIIPS in Africa report for 2023 publication underscores the importance of a harmonised, principles-based approach to consumer protection and data privacy in IIPS. By addressing the challenges and leveraging the opportunities, Africa can pave the way for a more inclusive, secure and consumer-friendly digital payment ecosystem.


By Girum Fekadu Diriba, CDFP

DFS Risk Manager at Ethiopost

AfricaNenda Community of Practice (ANCoP) Ambassador

DFI Alumni & Community Member


Established in 2015, Digital Frontiers Institute is a proud brand of Digital Frontiers. Learn more about the Instant and Inclusive Payment Systems (IIPS) programme and find out how to enrol: