While most African countries are seeing growth in financial inclusion including access to digital payment systems, a new report shows that there is still a gap of over 350 million Africans, majority of whom are women that are yet to access digital payment systems.

The report dubbed ‘The State of Instant and Inclusive Payment Systems in Africa’ was unveiled at the sidelines of the three-day Global System for Mobile Communications Association (GSMA) Mobile World Congress (MWC) that kicked off in Kigali on October 25, in Kigali.

The report was prepared by AfricaNenda, the United Nations Economic Commission for Africa (UN ECA), and the World Bank (WB)

Precisely, the report calls for more inclusivity to leverage the current payment systems and infrastructure to benefit Africans and push the African Continental Free Trade Area agenda.

"Instant payment systems in Africa are a reality and it is driving a significant amount of traffic. Last year, nearly $1 trillion in value across16 billion transactions were recorded. This amount was driven by mobile money and cross-domain systems,” said AfricaNenda Deputy CEO, Sabine Mensah.

She added that there are 29 instant payment systems in Africa of which 26 are domestic (country-based) while three are regional.

"Despite this group in terms of inclusivity, customers are saying that they need to have a broad range of payment systems that are affordable and do not limit them on how much they can transact,” Mensah added.

Although the report calls for more instant and inclusive payment systems, it also points at the security part saying that the systems should be strongly protected from cyber criminals that may attempt to hack into them.

Speaking about security of instant payment systems, Robert Ochola, CEO AfricaNenda said that there are protection features that AfricaNenda has been working on with Rwanda as part of future protection systems.

He added that, "IPS is critical in the successful implementation of the AfCFTA by providing instant and inclusive payment solutions for the majority of businesses on the continent, including SMEs”

The report shows that despite all the increasing interest in these instant payment systems, only a few are showing signs of potential to reach a state of mature inclusivity due to regulatory challenges, lack of data transparency, and high costs for both payment system providers and end-users.

The report also underlines that instant payment systems need to take into account the lived reality of consumers more deliberately in order to address users’ needs and enable them to access various payment services through multiple channels, and so trigger a more regular usage of digital payments.

Trends indicate that there is a rapid rise of IPS deployment in Africa- 29 mapped live instant payment systems in Africa (26 domestic instant payment systems, 3 regional IPS) and of these, 72% of IPS support person-to-person (P2P) and person-to-business (P2B) making approximately 16 billion transactions processed in 2021 worth a total value of over $930billion (32% average annual growth in total transaction volumes since 2018; and 40% average annual increase in total value).

Though it shows that two out of three end-users make digital transactions on a weekly basis and many efforts to achieve inclusivity the report showed that, no IPS has yet reached a mature inclusivity level.

"Most instant payment systems do not offer access to channels most demanded by end-users and do not yet enable cross-domain interoperability for more end-user choices. Many of them only provide limited use cases, and only a handful have integrated B2P, P2G, and G2P payments,” the report said in part.

Based on ranking, the report also showed that 13 instant payment systems were not ranked (not fulfill basic inclusivity criteria), 11 in the basic level Minimum channel and use functionality)- including Rwanda, 5 on the progressive level, and non at the mature level (above the other levels but with Low-cost for end-users within a not-for-profit business model)

The CEO of Rwanda Development Board (RDB), Claire Akamanzi, said Africa deserves the best in many ways, and bringing instant and inclusive payment systems not only supports businesses; it brings conveniences; it brings sufficiency but also supports businesses to grow faster.

"I think it’s really important to think about how inclusive our payment systems can bring cheaper and faster ways to cross border transactions that we are expecting from the AfCFTA. As Rwanda, we are really committed to making this all happen. we encourage disruption and continuously make the country attractive for businesses and fintech’s in particular” she said.

Rwanda’s Minister of ICT and Innovation commended the report and AfricaNenda’s support to transforming Rwanda’s IPS, especially on cross-border trade and P2P establishment but asked the organization to consider doing research on the Fintech ecosystem to deeply inform the market operations.