[ad_1]
Rossini Zumwalt Emergent Payments : "Global traders looking to launch in Africa should give priority to mobile money as part of the local payment strategy."
"The term leapfrog effect" often used to describe the technological evolution of Africa – from the typewriter to the smartphone. Sub-Saharan Africa has long led the charge in the expansion of the mobile industry and a recent report highlights the scale of e-commerce opportunities here perhaps even greater than this that we thought.
More than half of sub-Saharan Africa will be connected to mobile phones by 2025. The report predicts that over the next seven years, single mobile subscribers will grow from 444 million to 634 million. 40% of the region's population is under 16 years old. Although this demographic group has significantly lower mobile ownership levels than the rest of the population, as we age, the situation is at an even greater boom. If we turn to the launch in Africa, it means that it is becoming a priority to make mobile money an essential part of the local payments strategy. The mobile wallet electronic service allows users to store, send and receive money using their mobile device. This is a popular alternative to bank accounts and has played a major role in greater financial inclusion.
How does mobile money work?
Ghana is a fine example of a market increasingly dominated by mobile money. 61% of eCommerce sales in Ghana are now done with mobile money. The mobile money MTN is the biggest operator out there, but there are also Airtel and Tigo. To put this in perspective, the next most popular payment method in Ghana is locally issued cards. This represents only 15% of the market and is largely limited to the upper clbad. Where mobile money has been successful, it is in the financial inclusion and in the opening of electronic commerce to the mbades.
On my recent payment trip to Ghana, I was able to see firsthand how widespread adoption is. We saw kiosks everywhere we went. What is more remarkable is that mobile payments have only appeared in Ghana in recent years and the market is at a turning point. There are about 9.4 million subscribers and 122,000 active agents. Compare that in Kenya – where the mobile payments landscape has been evolving since 2000 – this country has more than 34 million subscribers and 165,000 active agents. You can see the potential for additional growth here and we expect Ghana to catch up quickly with Kenya. The most common way we observed African consumers adding money to their mobile money accounts was through direct cash deposit at a mobile money agent kiosk. The funds can also be transferred from one bank account to a mobile money account or also received directly from another mobile money account.
However, the ease of mobile money depends on the local infrastructure. In a recent Bloomberg report, Nigeria is lagging behind, despite being the largest mobile phone market in Africa. One of the obstacles that Nigerian consumers face is that they have to use a bank verification number to make mobile payments. This goes against the goal of mobile money reaching unbanked people. As a result, financial inclusion in Nigeria has declined over the past three years. At the same time, the number of people in banks has increased in the region. What this has highlighted is the need for infrastructure to support the popularity and economic potential that mobile money can exploit. According to Bloomberg, the Central Bank of Nigeria is facing the reality that it will not reach its goal of financial inclusion of 80% by 2020 if something does not change.
What does this mean for global merchants? [19659003] One of the main mistakes to avoid is to approach Africa as if it were a country and not a continent with multiple different markets. Consumers in the region have diverse motivations, payment preferences and behaviors. In large part, the infrastructure plays a big role in shaping this. Despite the complexity, these markets are ripe for the expansion of e-commerce. With a rapidly growing population of one billion people, there is tremendous growth potential. Consumers are becoming more educated, more technologically savvy, demanding more Western goods and services, and have significant brand loyalty. The key to success is an efficient local payments strategy and a personalized market approach.
About Rossini Zumwalt
Rossini has extensive experience in the field of e-commerce payment and risk management strategy and management. both as a merchant and as a solution provider. She was Senior Director at Symantec and prior to that as Head of Global Treasury. She has also held several senior positions for the Merchant Risk Council.
About Emergent Payments
.png){kind=small}
Emergent Payments offers a global and local payment solution for high growth markets. They serve as a payment facilitator for digital merchants in Asia Pacific, Latin America, Africa and the Middle East. For more information, visit www.emergentpayments.net
Source link
