870 billion dollars. This is the total amount of mobile money transactions that is expected by 2026 in developing countries. This trend is particularly noticeable in Sub-Saharan Africa, where a 60% increase in mobile payments is expected by 2025, opening up the African market even more to international e-commerce.
Today, nearly 50% of the African population does not have a bank account. Payment solutions are therefore limited and this is where mobile payment becomes very useful for these regions. As cell phones are relatively widespread, the preferred method for financial transactions has become the cell phone, and this for products or services. (Grocery stores, cabs, etc.). This situation is relatively recent and follows the rapid evolution of technology and its use in Sub-Saharan Africa.
The use of mobile internet and phone plans in Africa diverges greatly from the use in Western countries. Monthly subscriptions are not the rule. Purchases are also made on an ad hoc basis in the form of prepaid top-ups offering different call times, a predefined number of SMS and a limited amount of internet data. These refills can be found in many stores and therefore allow the user to use his device whenever he wants.
This phone credit, put in the form of a sum of money, allows the user to pay for his purchases in certain stores. This avoids cash payments and allows to bypass the absence of a bank card for the buyer or a payment terminal for the seller.
This situation, which is conducive to mobile purchases, is therefore very interesting for several players:
- Banks, which see in this operation a way to set up a new offer based on telecommunications on the local level.
- Cell phone companies, who see themselves as a major pillar of the good functioning of the economy
Recently, companies offering content in “Direct Carrier Billing” whose offers are deducted from the mobile bill, taking advantage of this use of the mobile to offer services or content directly accessible on the users’ device.
If 495 million people were using mobile payments in Sub-Saharan Africa in 2020, estimates are going well and predicting 615 million users by 2025. A curve that continues to rise impressively, and which gives the signs of the birth of a major market for the years to come. African commerce seems to be built around mobile payment, and the players in this sector will have to face a colossal growth as its place in the local market continues to grow.