Razorpay Payment Gateway: Why Mobile Payments in Africa are Rapidly Rising

Title: Africa's rapid rise in mobile payments

In Kenya, the green logo of the mobile payment system M-Pesa can be seen everywhere, whether it's an upmarket hotel in a bustling city or a roadside stall in a remote lane. 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, making wallets a non-essential item when out and about, with people carrying only their smartphones.

Mobile payments are gradually becoming a trend on the African continent. According to data from Germany's Statista data platform, 17% of African consumers use mobile payment services daily in 2023, and nearly half use them at least once a week. These figures show that mobile payments are widely popular and favoured among African consumers.

Mobile Payment: The Convenient Choice

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 is attributable to a number of factors. The popularity of smartphones has laid 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 increase in mobile internet penetration has also contributed significantly to the growth in the number of mobile payment users.

For many Africans, having a mobile phone is easier than a bank account. As a result, mobile payments are becoming increasingly popular in African markets. 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 and fast, 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.

High penetration rate: a bright future for mobile payments

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

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 a benchmark 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 users, accounting for 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 to help upgrade the system and bring more new products and services to Africa, making it a leader in the field of electronic payments in Africa.

The mobile payments market is also booming in Nigeria, Africa's most populous country. Local media reports that nearly 80% of real-time payment transactions in Nigeria in 2020 will be done through mobile payments. In South Africa, signs for mobile payment platforms such as SnapScan and Zapper are everywhere.

Bright prospects for China-Africa cooperation

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

Chinese-funded startup mobile payments company PalmPay is seeing significant results in countries like Nigeria and Ghana. In the past year, PalmPay's number of active users has grown fivefold to 25 million. The company plans to expand into countries such as Kenya, Uganda and Tanzania.

PalmPay's Managing Director, Hika Enwozu, in an interview with the press, said 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 multiple services. Users can use the app to pay their electricity bills, top up their mobile phone bills, purchase various 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 has broad prospects and huge growth potential, leading the global trend. In the future, the African e-payment market will continue to expand rapidly, injecting new vigour into the continent's economic development.