Doris Dokua Sasu
Research Expert Ghana and Nigeria
Payment methods in Africa - statistics & facts
Cash is the predominant means by which people make payments in Africa. Nonetheless, retailers offer consumers in Africa several channels to make payments for purchased products and services, including digital. For African economies, this also means circulating enough currency to meet the demands of the population who often adopt informal payments and cash on delivery services. For countries like Nigeria, Kenya, Egypt, and Morocco, cash forms a central part of online and Point-of-Sale transactions.
Nonetheless, in the face of the slowly developing rate of bank account ownership, actors in Africa often engage in finding solutions, including digital, to combat the rising demand for online and offline payment settlements.
Mobile payments are on the rise
Mobile money is a proven asset to both online and offline payments in Africa. In some countries, traders accept onsite mobile payments for services rendered, as an alternative to physical cash. In the same way, for online transactions, mobile payments are a growing recourse for a continent with a slowly rising penetration rate of credit cards, debit cards, bank accounts, and other payment channels. East and West Africa record some of the highest volumes of mobile money transactions in Africa.Instant payments are mainly through mobile money
Mobile payments are in the lead in terms of instant money transfers in Africa. According to a survey, mobile money supported over 25.8 billion of the over 31 billion real-time fund transfers made across the continent in 2022. This yielded close to 350 billion U.S. dollars in value. The survey also revealed that East Africa had the highest number of instant payment systems in Africa that year. However, Nigeria, a West African country, ranks first on the continent and is even ahead of the UK and the U.S. Generally, instant bank transactions are not very popular on the continent in comparison to instant mobile money payments.How does the future look for bank payments?
For some African countries, almost the whole population has a bank account, whereas the penetration rate reaches as low as 13 percent for other countries in the region. In fact, only about eight percent of Africa’s population uses online banking. A survey conducted in Angola between 2019 and 2020 revealed that the main barriers to opening a bank account in the country were insufficient money and the lack of documentation. According to another survey, Nigerians without a bank account underlined that this was mainly due to the absence of enough money or the reception of irregular income. These, among others, affect the growth of the banked population in Africa, although the latter is necessary to simultaneously increase the adoption of bank payments.Nonetheless, in the face of the slowly developing rate of bank account ownership, actors in Africa often engage in finding solutions, including digital, to combat the rising demand for online and offline payment settlements.
