With some 40 currencies across 54 countries, divergent preferences for payment methods and even the same payment method processed differently depending on the country, it’s safe to say the African payment landscape is deeply fragmented.
But Omoniyi Kolade, CEO at pan-African payment company SeerBit, is optimistic about the opportunities that addressing the fragmentation and fixtures in the payment space can create when it comes to transactions between consumers and businesses.
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Kolade first pointed to the confidence global card schemes give consumers to make payments around the world, knowing that their cards are likely to be accepted anywhere in the world.
That is why resolving the acceptance issue is key, he said, because it in turn drives interoperability: “As long as customers can move easily and can transact easily … it becomes easier for businesses.”
He added that the challenge of payment collection on the continent should be tackled with a global perspective in mind in order to build a seamless payment ecosystem without borders that is inclusive for all.
Of course, money moves at multiple levels. Pointing to the Pan-African Payments and Settlement System (PAPSS), Kolade said that interbank rails and international cooperation are also critical to solving the problem of Africa’s fragmented payments ecosystem.
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However, financial institutions alone cannot connect all the dots, he argued. Because although they play an integral part in the way money moves around the world, “[banks] do not have [the] capacity to go down to last mile capability.”
This is where FinTechs like SeerBit have stepped in to digitize Africa’s cash-heavy economies while enabling financial service companies to seamlessly receive and manage payments from consumers regardless of the payment methods used.
“Everybody knows cash is king but there’s a limit to what cash can do in the market today [and often limited to] person-to-person payments. For businesses to scale, you need more than cash and have to look towards going digital,” he noted.
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Leveling-up African Payment Systems
To create a payment system that can match the global reach and acceptance rates of international card schemes, banks, payment service providers, and various other FinTechs need to cooperate along multiple axes to take cross-border and cross-infrastructure collaboration “to the next level,” Kolade said.
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As one of Africa’s most popular payment methods, mobile money is one area that holds promise for card-level interoperability but even at the national level, mobile money networks often operate in silos.
Building the connections that will allow merchants to accept mobile money payments from multiple providers across the continent will “open up the market entirely,” he explained, providing major benefits for international trade and tourism.
Moving forward, SeerBit will continue working on solving this issue of siloed payment systems by creating a single integrated system that will allow businesses to accept multiple payment methods from multiple providers, which will in turn take the complexity out of electronic payments, even those that cut across borders.
Finally, while initiatives like PAPSS are helping to streamline cross-border trade, there are also social aspects that come into play.
According to Kolade, if such schemes are to deliver a more inclusive payments space for Africa, they need to be complemented by technologies that digitize everyday business cycles and address the needs of financially excluded populations that are currently over-reliant on cash transactions.
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