In the story of payment technology in Africa, financial institutions have had to compete with a range of alternatives from outside the spheres of banking and traditional finance.
Just look at how the rise of mobile money has turned telecoms operators like MTN and Airtel into some of the most significant facilitators of financial transactions on the continent, or how Nigerian eCommerce giants Konga and Jumia are increasingly shaping Africa’s digital payment landscape.
In recent days, however, the announcement by Nigeria’s Guaranty Trust Holding Company (GTCO) that it had received final approval from the Central Bank of Nigeria (CBN) to commence the operations of its FinTech subsidiary, HabariPay, marks the entrance of one of the country’s leading African banks into the region’s increasingly crowded e-payment market.
Commenting on the news, GTCO’s Group CEO, Segun Agbaje highlighted the centrality of payment technology to the group’s strategic business goals:
“Payments are central to the development of financial services globally and represent a key growth area for the Group […],” adding that “our vision is an Africa where every payment is digital, and we hope to achieve this by increasingly leveraging technology to improve access to financial devices for individuals and empower businesses across Africa with the right digital tools to thrive.”
To coincide with HabariPay’s launch, GTCO has also unveiled Squad, an all-purpose solution that brings together several technologies such as a payment gateway, eCommerce platform and Point-of-Sale app under a single roof, hinting at the adoption of a super app model which has become increasingly popular in emerging markets across Africa.
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Competition Heats Up in African Super App Market
By throwing its hat into the super app ring, HabariPay will compete with similar services from ecommerce giants Jumia and Konga, as well as popular offerings from Nigerian FinTechs Flutterwave and Paystack.
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With smartphone penetration still low across the continent, more and more financial services providers have entered the growing market, while mobile money platforms like Airtel’s Money Wallet have moved diversifying their offerings beyond USSD-based transactions.
Against the backdrop of growing demand for affordable, easy-to-use digital payment solutions across African markets, Squad’s transparent, easy-to-use fee structure make it a prime candidate to syphon currency flows from popular mobile money networks.
But if GTCO is serious about offering a viable alternative to mobile money transactions and if it is to see widespread usage of HabariPay outside of Nigeria, then Squad will need to integrate with Africa’s existing payment ecosystem, including other super apps and non-Nigerian banks.
What’s more, as the CEO of Airtel Mobile Commerce Vimal Kumar Ambat told PYMNTS, USSD-based mobile money transactions won’t be disappearing any time soon, especially considering new eCommerce possibilities that enable users of mobile money wallets to make online purchases.
Watch Airtel Money CEO Interview: Low Smartphone Penetration Means USSD Still Fulfills Key Function across African Economies
Ultimately, GTCO’s move into e-payment services with HabiriPay and Squad reflects an acknowledgement that the sector’s growth potential on the continent is huge.
On one hand, greater data coverage and smartphone usage will drive an increase in mobile payments as more people see the technology as a realistic alternative to cash for everyday transactions.
And on the other hand, as African economies mature and consumer spending power increases, demand for eCommerce and digital services that require user-focused digital payment solutions is bound to grow, with super app models like Squad’s playing an important role in the new African payment paradigm.
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