Instant and Inclusive Payments Systems – Trends, Challenges and Developments in Africa

The increase in digital interactions that we have had since COVID-19 hit us three years ago, has led to an increased demand for instant and inclusive retail payments. In Africa, there are already nearly 30 of these systems according to a recently published “The State of Instant and Inclusive Payment Systems in Africa 2022” by AfricaNenda. This is quite an achievement considering the pivotal role that payment services play as a gateway to other financial products and services. Moreover, being able to send and receive low-value payments at any time at a very low cost is a powerful mechanism for the economic empowerment of the most vulnerable populations.

One of the most exciting findings about this report is the growing number of schemes that enable instant transfer between bank accounts and mobile wallets. Slowly, we seem to be moving away from the mobile money-only or bank-only systems, which is quite an exciting trend. Banks and mobile money operators are the main participants of IIP systems in Africa, but it is more and more common to see fintech’s increasing their presence either as direct participants or third-party providers.

Despite this positive trend, there is still a long road to be walked to make instant payments inclusive and broadly available. The use cases are still quite limited which limits the capacity of these systems to reach the scale necessary to be sustainable. The fact that only 28% of the population in Africa is connected to the mobile internet (GSMA, 2021) makes USSD the main channel to access IIP systems, a channel that tends to be expensive and not always user-friendly. The perceived risk associated with the increase of digital frauds also makes it often hard to increase adoption and usage. And there are still many places where regulatory constraints make it hard for IIP systems to flourish.

There are many challenges to overcome but behind each challenge, there is a great opportunity for making payments more inclusive. At DFI we are very excited about having a large community of payment professionals, many of them directly involved in the deployment of more inclusive instant retail payments systems. Through the IIPS programme, we are committed to continue building capacity in this area and tracking the most recent trends in the space. If you would like to expand your knowledge and get down to the nuts and bolts of Instant and Inclusive Payment Systems, we invite you to view the IIPS programme website and join us.

This self-paced course is designed to prepare students with the basic foundational knowledge of Instant and Inclusive Payments Systems. It is also a tool that can be used to prepare for the IIPS Foundations Exam. As a student, you will be free to work through the course materials (comprising videos and texts) at your own pace. The programme is available on full scholarship and open to all students with experience in payments who will then take and pass the Foundations Exam. To learn more, follow this link.

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: https://iipscertification.org/