Instant payment transactions in Africa cross $1trn mark but 400m people excluded – Report

Players in the Instant Payment System (IPS) industry gathered in Accra, Ghana, on Wednesday for the launch of the 2024 edition of the State of Inclusive Instant Payment Systems in Africa Report.

Bankers, regulators, multilateral institutions, policymakers across Africa, and other global partners attended the launch at the Mövenpick Ambassador Hotel, Accra.

The annual report, produced in partnership with AfricaNenda, the World Bank, and the United Nations Economic Commission for Africa (UNECA), highlights the growth of Instant Payment Systems (IPS) across Africa and explores their impact on financial inclusion.

A graph showing instant payments in Africa

The 116-page report presents a picture of a rapidly evolving financial ecosystem that holds immense promise for Africa’s underserved communities.

“In just five years, the volume and value of transactions processed through IPS in Africa have grown by 37 per cent and 39 per cent respectively. This growth reflects a broader trend of digital payment adoption, driven by increasing mobile phone penetration, fintech innovation, and regulatory support,” AfricaNenda stated in the report.

In 2023, IPS processed 49 billion transactions, with the total annual IPS value exceeding $1 trillion.

However, despite this success, concerns remain regarding interoperability, digital public infrastructure, access for low-income individuals, lack of regional money transfer systems, fraudulent activities, and regulatory gaps.

Experts estimate that over 400 million people on the continent remain excluded from IPS.

Speakers at the event reiterated the need for inclusion, trust, affordability, and convenience, urging deliberate efforts to ensure the system works for the majority of Africans.

In his remarks, Robert Ochola, CEO of AfricaNenda, stressed the need to expand access to IPS, aligning this goal with the universal financial inclusion agenda by 2030.

“AfricaNenda and its partners are calling for a collective push to expand IPS and deliver solutions that cater to every citizen, particularly those in rural and underserved areas. The goal is to ensure universal financial inclusion by 2030, a vision that could be realised if the 27 planned IPS initiatives are successfully implemented,” Mr Ochola said in his opening remarks.

400 million excluded — 240 million are women

The exclusion of 400 million people was a major concern for policymakers, regulators, and private sector players at the event.

According to AfricaNenda, 240 million of the excluded population are women.

Speaking on this gender disparity, Sabine Mensah, deputy CEO of AfricaNenda, described the data as alarming and suggested it might not fully capture the extent of the issue.

Sabine Mensah, Deputy CEO of AfricaNenda

She urged central banks, financial regulators, and service providers to take urgent steps, including collecting more granular data, fostering trust, and increasing women’s participation in the sector.

“We recommended measures for regulators and service providers. At the policy level, we suspect the problem might be worse than the data shows, as financial records do not always segregate data. For example, while we know there are 200,000 transactions, we don’t know how many of them involve women.

“Central banks and financial regulators must mandate data collection to establish a baseline. Without measurement, improvement is impossible. Additionally, for women, trust is a key factor. Including more women agents and enhancing proximity to financial services, especially in rural areas, can help address this issue,” she said.

Ms Mensah also reiterated the need for greater investment in women’s education to close the financial inclusion gap.

“Financial service providers must invest more in consumer and digital education. Simplifying processes is also essential,” she added.

Concerns Over Fraud

Fraud was another major issue discussed during the panel sessions. Participants expressed concerns about the misuse of IPS, system vulnerabilities, and users’ lack of trust, exacerbated by fraud cases.

During the post-event press briefing, Akinwale Goodluck, deputy CEO of AfricaNenda, outlined some of the organisation’s efforts to partner with monetary authorities to develop legal and regulatory frameworks aimed at curbing fraudulent activities.

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He also stressed the importance of sensitising users on data protection.

“While we enjoy instant payment systems, many of us unknowingly share personal data. For instance, at conferences, attendees often fill out forms, and these forms are not always disposed of securely. Fraudsters can use this information to their advantage.

“Consumer protection agencies must shift the burden of sensitisation from users to service providers,” he said.

Silver Lining

The SIIPS Report 2024 highlighted several opportunities to accelerate progress, including driving innovation through fintech licensing, addressing gender disparities, and ensuring every country has access to a domestic IPS.

The SIIPS 2024

As more countries build the payment layer of their digital public infrastructure, there is growing momentum towards enabling seamless cross-border payments across Africa through interconnected instant payment systems.