Payment acceptance, interoperability will separate Africa’s Fintech market contenders
To differentiate service and solutions in Africa’s growing Fintech space, innovators must focus on interoperability and payment acceptance.
This is according to Omoniyi Kolade, CEO and Founder of payments company SeerBit.
He said, “The African payment landscape system is deeply fragmented and acceptance is a key issue. Resolving the acceptance issue is key as it in turn drives interoperability. As long as customers and businesses can move and transact without a lot of barriers, it becomes easier for businesses to scale”.
Kolade explained that Fintech companies should have a single integrated system that will allow businesses to accept multiple payment methods from multiple providers, which will then remove the complexity from electronic payments, even those that cut across geographical borders.
According to a recent McKinsey report, The Future of Payments in Africa, the fragmentation of payments in Africa could result in consolidation of companies or payment technologies.
“If Africa’s e-payments landscape evolves similarly to that of Europe and the United States, then consoli¬da¬tion is probable. Eighty-five per cent of experts surveyed expect some form of consolidation in the market over the next three years,” the report said.
According to McKinsey research, scale is of paramount importance for the long-term economic viability of players in the payments landscape.
“While some markets are large enough for players other than the market leader to be economically viable, ultimately the economic advantages are ruthlessly in favour of scale,” it warned.
In the short term, Kolade foresees more entrants arriving in Africa’s Fintech market to bridge the digital payment shortage in Africa.
“Currently, many Africans need high-touch services that is, someone to attend to them like bank tellers, agents, hence moving people to digital services would require more investment and education which is expensive to scale,” Kolade concluded.