Payment Developments in Africa

As Africa continues its growth trajectory and foreign investors – financial services organisations and others – seek new investment opportunities across the continent, Africa’s payment systems are becoming an increasingly important topic.

At KPMG, we are focussed on helping both private and public organisations respond to the transformation now underway across Africa’s payments landscape. That is why we have developed this series on payment developments in Africa. We believe that, by sharing our insights and knowledge, we can help drive Africa’s payments journey. In our first edition of Payment Developments in Africa, we offered a forward-looking perspective on the payment challenges facing Africa’s markets. We also examined the ‘silent revolution’ now underway across Africa’s f inancial services sector and looked at how Africa’s Financial Technology (FinTech) companies are helping markets leapfrog the legacy challenges faced in other parts of the world. In this edition, we take a closer look at many of these trends and discuss how they are impacting the payment sector.

This report kicks off with a profiling of Ghana and Tanzania. We then go on to explore how the payment sector is evolving at a regional level with WAEMU (West African Economic Monetary Union). We then review latest FinTech trends, investment numbers and emerging technologies. This report also includes our viewpoint on one of the biggest challenges facing Africa’s payment sector: financial inclusion. In ‘Bridging the Great Divide’, we explore the evolving role of digital innovators and regulators as markets move towards greater financial inclusion. We believe this report provides financial institutions, regulators, investors and consumers with deep insight into current trends and challenges in Africa’s payments sector. With insights based on KPMG’s broad regional and local experience, extensive knowledge and understanding of payment reforms, strategy and innovation in Africa, we hope this edition of Payment Developments in Africa delivers new ideas and catalyses further change in Africa’s payment markets. To learn more about the issues raised in this report – or to discuss the unique challenges facing your organisation – we encourage you to contact your local KPMG member firm or any of the contacts listed at the back of this publication.

Executive Summary

Country spotlight: Ghana makes the shift from cash to digital

While Ghana’s payment system has seen significant improvements over the past decade, particularly in terms of payment infrastructure, the country remains largely a cash (and increasingly cheque) society. In this country spotlight, we explore the Central Bank initiatives, regulations and systems governing Ghana’s payment environment and look at the evolving mobile, electronic and alternative payment markets.
Country spotlight: Mobile drives massive change in Tanzania

Despite significant gaps in the current regulatory regime governing payments, Tanzania boasts a safe, secure – and increasingly innovative – payment sector. While the country remains a largely cash dominated economy, this spotlight report finds that Tanzania’s Central Bank, policy makers and payment participants are eager to improve the efficiency, convenience and accessibility of payment systems.
Regulatory updates and developments: Kenya, Nigeria and South Africa

In our first edition of Payment Developments in Africa, we explored the payment regulation in three key markets: Kenya, Nigeria and South Africa. In this chapter, we provide readers with an update on the latest regulatory, sector and market developments in these countries.

Regional spotlight: WAEMU drives regional payment coordination

Over the past two decades, the Central Bank of West African States (BCEAO) has been rolling out a series of reforms aimed at modernising the West African Economic and Monetary Union’s (WAEMU) payment systems, automating trading and settlement systems and developing an interbank card payment system. In this section, we take a look at the history of WAEMU, highlight key regulatory trends and discuss the regional payment systems in the region.
Bridging the Great Divide

As Africa’s governments and Central Banks seek to improve financial inclusion and drive in-bound investment, new and exciting opportunities are emerging for both traditional banks and FinTech start-ups. In this feature we explore the latest investment trends, technologies and show how Fintechs are partnering with payment industry players to solve for access to payments networks and system. We also bring together some of the ideas shared in this report to explore the gaps and opportunities that must be faced in order for Africa’s governments and regulators to finally bridge the great divide.