While cash and mobile money remain the dominant payment methods in Africa, they come with significant challenges. Cash is inefficient, insecure, and expensive, while mobile money services often lack the necessary regulatory support to operate independently. However, key emerging trends in the sector are helping to drive meaningful financial inclusion across the continent.

One of the most significant trends in the African payments sector is the increasing collaboration between banks and Fintech companies. Banks, as regulated entities, play a critical role in processing funds, which then flow into digital wallets where Fintechs are best positioned to provide digital services. There is scope to offer even more functionality and convenience that answer specific market challenges and pain points, including bill payments, airtime top-ups, or public transport payments, among others. 

By providing incentives for users to keep their funds in these wallets and use them for digital payments, the adoption of digital payments can increase rapidly and reduce the reliance on cash on the continent.

Closer collaboration between banks and Fintech companies is a positive development and has the biggest potential to drive financial inclusion in Africa. In many African countries, regulators are paying closer attention to new players in the sector. While Fintech companies often lack the necessary licenses to operate independently, banks can provide the necessary regulatory support with the end goal of offering a broader range of services to their customers. By working together, banks and Fintechs can help to promote financial inclusion and make digital payments more accessible, and, crucially, more trusted.

Another trend that is driving the growth of digital payments in Africa is the explosion of cross-border remittances alongside the urgent need for these to improve. South Africa to Zimbabwe is one of the largest corridors of cross-border remittances globally, and a staggering 84% of these transactions are still cash-based. 

According to the World Bank, remittances to low- and middle-income countries grew to US$626-billion in 2022. These remittances are also an essential source of foreign currency for many African countries, helping to support economic growth and development.

To facilitate cross-border remittances, many companies are developing pool accounts that allow for instant remittances of funds. Associations are also putting in place regulatory frameworks that promote innovation and protect consumers, and these developments will help sustain the growth of the industry and make it more accessible to all Africans.

QR payments are also gaining traction in African markets, offering merchants an affordable and convenient way to accept digital payments without expensive hardware. This payment method has been hugely successful in markets like China, where QR is widely used for everything from buying groceries to paying for public transport. In Africa, QR payments have been slower to take off, but their potential is significant. Visa and Mastercard are investing heavily in SME support to drive acceptance and create more opportunities for digital payments. 

Obviously, QR offers several advantages over traditional point-of-sale systems. For merchants, QR payments are affordable and easy to use, requiring only a smartphone and an internet connection. For customers, QR payments are convenient and secure, allowing them to make payments without the need for cash. Once again, acceptance is largely a function of the underlying trust and overall convenience of the payment method.

Ultimately, the prevailing dominance of cash in Africa will only be truly upended when payment models are instantly efficient and offer instantaneous value. In the unique African context, customers must have full control over their money with seamless, interoperable, and user-friendly solutions.