Africa's digital economy is slowly evolving, showing huge potential for the continent's transformation towards a cashless society. Whilst the progress has been slow, African countries share some of the world's highest speeds of digital growth. Electronic payment systems are superseding cash, bank notes, payment orders and cheques with a huge demand for faster and more convenient ways to pay for goods and services.

From a global perspective, people are constantly in pursuit of faster and more convenient ways of paying for goods and services. With the advances in technology, it is now possible to satisfy this demand at reasonable costs. From an African standpoint, to ensure sustained economic progress and electronic payment growth across the region and other emerging markets, financial inclusion is crucial. Taking into consideration that several areas in the continent still do not have banking systems, whilst those that do are slowly transitioning from a cash-based society to electronic payment methods.

Financial exclusion is a major challenge with almost two thirds of the African population falling outside of the financial mainstream. In order to address this challenge, it has become more important than ever to make financial services more easily available to the millions of low-income, unserved and unbanked individuals. Through the use of technology, households, local business and technology companies become empowered to create a world beyond cash.

Initiatives such as the 16th edition of the annual CBN Cashless CardExpo – in collaboration with the federal government of Nigeria and decision makers in the financial space plays a fundamental role in advancing the development of electronic payment in Africa, specifically in Nigeria. These efforts have been pivotal in encouraging citizens to bank which has also paved the way to economic freedom and financial inclusion for marginalised groups in the country.

In this light, it is important to understand that financially excluded markets are huge unserved populations looking for a solution, and lower income does not mean that electronic payments are out of reach. Over the years, many successful initiatives targeting lower-income segments have been established, such as micro payments and micro finance. With millions of Nigerians receiving funds from friends and family, it is a critical lifeline. These types of services have the potential to open up new remittance corridors, expand the scope of cashless money transfers, extend financial inclusion and grow the economy.

The e-commerce environment in Africa is robust and expanding at a rapid rate. This is driven by continued telecommunications infrastructural development, an increase in the number of mobile service providers and the decreasing costs of using the internet. This has resulted in more and more retailers placing their inventory online and opening themselves up to the global marketplace. This shows that electronic commerce is the engine that improves the economic well-being of a nation through rapid integration into globalisation and exploiting the evolving technology.

Currently, the widespread adoption of digital payment systems is expanding the sales volume of good and services. This is also reducing the barriers of immediate credit and the geographic boundaries to trade and exchange. This means that there is a huge amount of data traffic that is flowing across localities, nations and regions which is demanding the incorporation of efficient data handling mechanisms.

This type of digital evolution is not just convenient but also plays a vital role in stimulating economic growth not only in Africa, but across the globe. This will promote greater financial inclusion, and gives those without access to the formal banking system an introduction to formal financial services. In turn, this creates a virtuous economic cycle whereby increased consumption translates into increased production, more jobs, higher incomes and greater economic prosperity.

* By Omokehinde Adebanjo, Vice President & Area Business Head for West Africa, MasterCard.