India's Three-Way Payment Channel: International Insight｜Why Mobile Payments in Africa are Rapidly Rising

Nairobi/Beijing, Oct. 12 (Xinhua) - Headline: the rapid rise of mobile payments in Africa

By Xu Jiatong and Yang Jun, Xinhua News Agency

The green logo of the mobile payment system M-Pesa is almost ubiquitous in Kenya, whether it's an upmarket hotel in a bustling city or a stall in a remote street. Even in resorts and tourist attractions, mobile payments have become the norm.

The rapid growth and popularity of mobile payments in Africa has been remarkable, with wallets becoming less necessary as people simply carry their smartphones when out and about.

Mobile payments are emerging as a trend on the African continent. According to Germany's Statista data platform, 17% of African consumers use mobile payment services on a daily basis by 2023, while nearly half use them at least once a week. These figures show that mobile payments are gaining popularity and favour among African consumers.

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M-Pesa payment information is displayed at a cash register of a coffee shop in downtown Nairobi on September 16, 2021 Photo by Zhang Yu, Xinhua News Agency.

**Convenience: rapid rise of mobile payments**

As a key component of the Internet economy, mobile payments have enormous potential. According to dLocal, an international payments platform, the number of registered mobile payment accounts globally exceeds 175 million by the end of 2023, and sub-Saharan Africa is home to more than 156 mobile payment companies.

The rapid growth of mobile payments in Africa can be attributed to a number of factors. The widespread availability of smartphones has provided a solid foundation for mobile payments, while Africa's relatively weak banking infrastructure has made mobile payments a more practical and efficient method of payment. In addition, the growing penetration of mobile internet has supported the growth in the number of mobile payment users.

For many Africans, having a smartphone is easier than a bank account. As a result, mobile payments are becoming increasingly popular in the African market. Users can easily transfer and receive money by simply depositing funds into an account linked to their mobile phone number. This payment method is not only convenient but also cost-effective, especially in cross-border remittances, where the average rate for sending $200 via mobile payment is only 2.771 TP3T, much lower than the 6.091 TP3T for traditional payment methods.

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**Popularity: the bright future of mobile payments**

According to the industry report published by the GSM Association 2024, Africa reached 856 million registered e-money accounts in 2023, accounting for 491 TP3T of the global total, with new accounts accounting for more than 701 TP3T of global growth.

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People make transactions at an M-Pesa agent in downtown Nairobi on 16 September 2021 AFP photo by Zhang Yu.

Kenya's M-Pesa is undoubtedly Africa's leader in e-payments. As one of the largest mobile payment platforms in Africa, M-Pesa's success in Kenya has not only made the country a leader in e-payments in Africa, but has also set an example for Africa's digital transformation. According to the Communications Authority of Kenya (CAK), as of March 2024, M-Pesa has a market share of 94.91 TP3T in Kenya, with more than 38.7 million subscribers, representing 751 TP3T of the country's population.

M-Pesa, which means "mobile money" in Kiswahili, was officially launched by Kenyan telecoms operator Safaricom in 2007 and is known as Kenya's "Alipay". Since 2012, China's Huawei Technologies has been working with M-Pesa to provide technical solutions, help upgrade the system, and introduce more products and services to Africa, making it a leader in electronic payments.

Nigeria, Africa's most populous country, also has a vibrant mobile payments market. Local media reports that nearly 80% of real-time payment transactions in Nigeria in 2020 will be done through mobile payments. In South Africa, the logos of mobile payment platforms such as SnapScan and Zapper are almost ubiquitous.

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**A broader perspective: prospects for China-Africa cooperation**

China-Africa cooperation has achieved fruitful results in the field of electronic payments in Africa. Chinese enterprises have played an important role in this African mobile payment market, promoting the popularity and development of electronic payments.

PalmPay, a mobile payments startup backed by Chinese capital, has achieved significant results in countries such as Nigeria and Ghana. In the past year, PalmPay's active user base has grown fivefold to 25 million. The company plans to expand into countries such as Kenya, Uganda and Tanzania.

PalmPay's Managing Director, Hika Enwo, told the media that the company is "creating a super app" through which Nigerians can manage about $80% of their financial lives. This percentage is expected to increase further with the introduction of new features.

PalmPay not only provides a convenient way to pay, but also creates a platform that integrates various services. Users can use the app to pay their electricity bills, top up their mobile phone bills, purchase a variety of products and services, transfer money, borrow money and collect money.

Industry insiders believe that the successful co-operation between China and Africa in the field of e-payment in Africa is not only due to the complementary and mutual benefits of both sides, but also because of their common vision and strong belief in Africa's digital development. The African e-payment market is a global leader in terms of prospects and growth potential. In the future, Africa's e-payment industry will continue to expand rapidly, injecting new vigour into the continent's economic development.