Mobile payment systems in africa pdf

Africas quest for a cashless economy gains momentum. That is why we have developed this series on payment developments in africa. Recent years have seen an explosion in mobile payments in countries like kenya or the area of bangladesh. Why are these systems working here and not in other places where greater efforts are being made. Mobile payment market and research past, present and future. All the authors of this paper have been actively researching various mobile payment issues for the past several years and one of authors worked a number of years as an executive. A recent report noted that 39 percent of all mobile users in the u. Other central banks in africa, asiapacific, and latin america have introduced similar rules. Mobileenabled persontoperson payments, or mobile money transfer services mmt, are experiencing rapid adoption in many markets, in response to steady growth in remittances, the.

This service is therefore only available to people who possess a formal bank account. Africa is the global leader in mobile money, which has become an important component of africa s financial services landscape. A characteristic of the south african consumer habits is the loyalty in experienced procedures, an easy and secure payment system the consumer can trust on. In cote divoire, madagascar and tanzania, mobile money is. A psa is an association of banks that provide payment instruments in a specific payment stream to their.

Mobile money operators typically leverage an agent network to. With money being the major medium of exchange, payments systems were developed out of a need to facilitate growth of commerce and economic development. As the west develops new standards in mobile banking, countries in africa need not adopt the previous advancements atms, online banking, etc, but can jump straight to the new, frictionless mobile infrastructure. Mobile phone users statistics have gone meteoric in the last decade, and that forms the basis for mobile payments since, in africa, mobile phones are the major routes to access the internet.

The growth of mobile payment systems in continental africa is skyrocketing at an astounding rate. Key payment system development themes in subsaharan africa. We believe that, by sharing our insights and knowledge, we can help drive africas payments journey. Why are mobile payments so successful in developing countries. Payments are typically made in exchange for the provision of goods, services or to satisfy a legal obligation. Some 25 percent of the population of kenya is now using the service to make over 24 million transactions by may of 2010. During the course of february 2016, uber had launched a brand new wallet payment system in india. Consumers could purchase goods and services from the internet and send unencrypted credit card numbers. Payment systems access points dec 20 dec 2015 july 2016 mobile money agents 5,900 32,000 35,000 atms 426. Over the next ten years and beyond were set to see even. The growth of mobilepayment systems in continental africa is skyrocketing at an astounding rate. The mpesa mobile payment system was launched in kenya in 2007. In november 1995 a comprehensive new national payment system nps strategy, which was a collaborative effort between the south african reserve bank and the banking industry, was. Mobile money services regulation and creating an enabling.

The mobile banking and payment revolution by sunil gupta mobile technology is revolutionizing the global banking and payment industry. Pwc emerging markets driving the payments transformation 5 this 1534 age group also has a strong appetite for new. Mobile money services a bank in your pocket an overview of trends and opportunities 7 their accounts and to perform transfers and payments. Types of payment systems and instruments everyday people tradeexchange goods and services for money. Strategies of financial inclusion were developed by the sophisticated financial system in south africa, which affected the unbankeds demand for mobile money. To facilitate this analysis, usaidtanzania volunteered to host a team to explore the alternative payment systems to cash in the country.

Africa is the global leader in mobile money, which has become an important component of africas financial services landscape. The digital payment service has made various large acquisitions to bolster this intention. The crux of this study is on the adoption of epayment system in nigeria. Pdf mobile payment services in south africa matthias b. The unbanked in africa could be one of the biggest. Many small merchants, from food truck vendors to hair stylists, use mobile payments to process their transactions.

Mobile payment has evolved as a veritable channel for facilitating the growth of commerce. Today, as it faces new challenges, it has 30 million users in 10 countries and three continents. The arrival of the internet has taken electronic payments and transactions to an exponential growth level. In this article different types of payment systems are. Heres why mobile payments are the future of commerce. To compete in africa s diverse mobile money markets, banks must offer distinctive mobile and digital services not only in payments and deposits, but across the spectrum of financial services. The rise of mobile payments in nigeria it news africa. In our first edition of payment developments in africa, we offered a forwardlooking perspective on the payment. Supervisory challenges to mitigate security risks 7 table of acronyms app application bis bank for international settlement cnp card not present cpmi committee on payments and market infrastructures cpss committee on payment and settlement systems ci consumers international eba european banking authority ebpp. Mobile payment systems enable customers to purchase and pay for goods or services via mobile phones. The committee on payment and settlement systems 20.

More recently, fintechs have established a solid footing in the market, and a number of banks are beginning to compete. Seminal work has been done in this area in africa by the central bank of kenya, which authorized vodafonesafaricom to introduce the mpesa mobile payment system, with startling results. Worlds fastest growing region in mobile mobile financial services mfs use of mobile systems on the go for financial transactions and services. Top 3 benefits of mobile payments in africa mobile. Introducing and regulating mobile banking and payment. Today, mobile payment solutions are available to those without a traditional bank account and that is exactly why the opportunity. With the explosive growth of mobile technology throughout africa, latin america, and asia. Fundamentals of global payment systems and practices.

Mobile banking is a financial service often available in developed countries, but not in most. In 2002, only 3 percent of people in the entire continent had mobile phones. Its also called an electronic payment system or online payment system. We believe that, by sharing our insights and knowledge, we can help drive africa s payments journey. The bou has only approved mobile money operations when this is done in partnership with a supervised financial institution sfi. The mobile payments landscape and its opportunities. Development of effective oversight frameworks can help maintain public confidence and payment systems stability, particularly in low income countries lics. It offers new opportunities for banks to provide added convenience to their existing customers in developed countries, and reach a large population of unbanked customers in emerging markets. Management for europe, the middle east and africa, treasury services, bny mellon.

World economic indicators and gsma to structurally analyze. Harare townships and spaza shops in south africa have access to a new mobile payment system, days after vodacom announced that its shutting down its mpesa business. But mobile payment applications arent just being adopted on the continents of asia, europe and north america. The framework defines the regulatory environment as a policy path towards achieving availability, acceptance and usage of mobile payment services. If you look at mobile payments specifically, africa is actually one of the leaders in this space, says kobus ehlers, cofounder of the snapscan app. Overview of the national payment system in south africa the south african national payment system is presently undergoing various fundamental reforms. An epayment system is a way of making transactions or paying for goods and services through an electronic medium, without the use of checks or cash. Mobile network operators mnos have dominated mobile money services in africa for the past decade. Is uber going to make a play for the mobile payments space. Philip ngarambe, the chief operations officer of ac group, a digital payment systems company in rwanda, explains that previously, by the time cash gets to. Last year, 70 percent of the continents population had a mobile phone and the number is still climbing. Payment systems in tanzania bank for international. Fundamentals of global payment systems and practices payment systems a payment system is a set of processes and technologies that transfer monetary value from one entity or person to another.

Mobile is the payment technology that will have the greatest growth over the next five years. Africa, the dwindling revenues in the mobile telephone voice business as well as the proliferation of. The following pages conjure a vision of the payments landscape in 2020 and. Say see ya to cash and give your credit cards a rest with these toprated apps that let you make contactless payments with your phone, pay your friends, and shop. This is up from 14 percent in 2014 and by my estimations will in the 70 percent range by. Regulations governing provision of payment orders through mobile phones. Mobile money service providers mmsp are required to hold, in an escrow account in their partner sfi, the equivalent of all the mobile money that has been issued to their customers and agents. Payment systems in south africa bank for international.