The Instant Payment Systems (IPS) in Africa hit over $1 trillion in 2023 as the continent slowly moves towards financial inclusion.
A 2024 report by AfricaNenda on the current State of Inclusive Instant Payment Systems (SIIPS) in Africa says that in 2023, 41 (31) African payment systems processed $49 billion in instantaneous payments, totalling about $1 trillion.
With 31 live IPS in 26 countries and another 27 nations preparing to launch their own systems, the report paints a picture of a rapidly evolving financial ecosystem that holds immense promise for Africa’s underserved communities.
The number and value of transactions handled by IPS in Africa have increased by 37 perccent and 39 percent, respectively, in just five years. This increase is indicative of a larger trend in the use of digital payments, which is being fueled by fintech innovation, growing mobile phone usage, and regulatory support.
Even though more individuals are using IPS systems, none of them have fully attained mature inclusivity, which allows for a wide variety of digital payment use cases that are affordable, accessible to everyone, and focused on clear consumer redress procedures.
However, worries about security, fraud, and network dependability continue to prevent women and other vulnerable groups from embracing digital payments.
“The goal is to ensure universal financial inclusion by 2030, a vision that could be realised if the 27 planned IPS initiatives are successfully implemented,” said Dr Robert Ochola, CEO of AfricaNenda at the launch in Accra Ghana.
Multiple data sources are integrated into the report’s methodology, including consumer surveys undertaken in five countries (Algeria, Ethiopia, Guinea, Mauritius, and Uganda), survey responses from IPS operators and central banks, and a thorough cataloguing of IPS systems throughout Africa.
A comprehensive picture of the trends, obstacles, and prospects for IPS in Africa is also provided via in-depth case studies from Mauritius, South Africa, Tanzania, and Zimbabwe, as well as expert interviews conducted around the continent.
“Access to safe, low-cost, and efficient digital payments has the potential to transform lives, remove the gender gap in finance, making people in emerging markets more financially resilient and foster growth of digital economy and access to capital for small businesses and women,” said Jean Pesme, Global Director, Finance, World Bank.
The report underscores that while significant progress has been made, true financial inclusivity remains a challenge. Recourse mechanisms to address fraud and privacy concerns remain critical gaps, particularly for vulnerable groups such as women, who continue to report feeling unsafe using digital payment platforms.
AfricaNenda and its partners are calling for a collective push to expand IPS and deliver solutions that cater to every citizen, particularly those in rural and underserved areas.
Together, these insights provide a holistic understanding of the evolving digital payments landscape and the critical challenges that remain for achieving full financial inclusion.
“As SIIPS 2024 shows countries in the Africa region have made remarkable progress on fast payment systems, more needs to be done through new use cases, the promotion of fintech and the involvement of the private sector.
As part of its financing and technical assistance and through Project FASTT, the World Bank is helping countries realise the transformative potential of fast payment systems, by learning from each other and driving change to meet market demands.”
The Economic Commission for Africa (ECA) is committed to partnering with AfricaNenda and key stakeholders to support Member States in building trusted, interoperable, and instant payment systems.
This collaboration addresses the growing demand for seamless transaction systems, fostering continent-wide economic integration and financial inclusion, and significantly advancing frameworks like the African Continental Free Trade Area (AfCFTA) while aligning with the African Union’s Agenda 2063 for an integrated Africa.
The SIIPs report is a valuable contribution, offering the latest rigorous insights that guide progress toward these ambitious goals.” – Stephen Karingi – Director at the Regional Integration and Trade Division of the Economic Commission for Africa.
The SIIPS Report 2024 highlights several opportunities to accelerate progress, from driving innovation through fintech licensing to addressing gender disparities, and ensuring every country has access to a domestic IPS.
With more countries building the payment layer of their digital public infrastructure, there is a growing sense of momentum toward enabling seamless cross-border payments across Africa through a mesh of inclusive and interconnected instant payment systems.
