The State of Inclusive Instant Payment Systems in Africa (SIIPS) 2023 report, which was released on November 8, highlights sustained growth in both the supply of instant payment systems and demand for their functionality.
According to the report jointly produced by AfricaNenda, an African-led organisation dedicated to accelerating the growth of inclusive payment systems with the United Nations Economic Commission for Africa (UNECA) and the World Bank, the volume of payments and the total value of payments processed have both experienced significant growth since 2018, increasing by 47 per cent and 39 per cent, respectively.
The report, launched in Addis Ababa, Ethiopia, also reveals that instant payment systems in Africa facilitated nearly 32 billion transactions valued at approximately $1.2 trillion in 2022.
Instant payment systems (IPS) are payment methods that are open to many users, operate digitally, and allow for quick, near-instant transactions around the clock, every day of the year, or as close to that as possible.
As of 2023, the total number of live domestic and regional IPS on the continent is 32, following three new IPS that were launched in Ethiopia, Morocco, and South Africa in the last 12 months.
However, not all of them are inclusive. The SIIPS 2023 report shows that so far, only nine countries in Africa have access to a progressed Inclusive Instant Payment System (IIPS) through three domestic systems in Ghana, Malawi, and Zambia and one regional system (GIMACPAY) in the Economic and Monetary Community of Central Africa (CEMAC).
According to the report, 27 countries have yet to set up a domestic IPS, although 17 have plans on the way and three regional payment systems (COMESA, EAC, and WAEMU) are also in development on the continent.
Speaking during the launch, Robert Ochora, the CEO of AfricaNenda, said that despite progress in digital financial services and payment innovations in Africa, there is still much work to be done.
This work includes investments in infrastructure, technology, technical skills, and policy reforms to ensure responsible access and usage of financial products, he explained.
Ochora also urged stakeholders in the African digital payment industry to share data, report actively, conduct data analytics to track progress, and provide evidence-based insights for policymakers and regulators.
“The remarkable growth of instant payment systems in Africa since last year is a testament to our collective commitment to driving positive change in the continent. SIIPS 2023 shows that together, we’re shaping a future where digital financial inclusion knows no bounds,” he added.
The report shows that so far, the majority of existing Instant Payment Systems (IPS) lack a ranking due to the absence of publicly accessible data on their performance, or have only reached a basic stage of inclusivity, providing limited channel capabilities and supporting only person-to-person (P2P) and person-to-business (P2B) transactions.
Referring to that, Stephen Karingi, the Director of Regional Integration and Trade Division at UNECA, highlighted that many financial providers in Africa have a significant opportunity to connect with more customers and grow their balance sheets in cash-based economies.
“There’s so much potential waiting to be unlocked,” he emphasised.
Huria Ali Mahdi, the State Minister for Women and Social Affairs in Ethiopia, highlighted the financial barriers that women face in the region, including limited access to bank accounts, property ownership, and formal credit.
She urged governments, the private sector, and civil society to collaborate in making instant payment systems “truly” inclusive for women and the entire African population, recognising the potential for the systems to empower women, save time and money, and support businesses and financial resilience.
The SIIPS 2023 report also spotlights four new case studies of IPS including eKash in Rwanda (managed by R-Switch), Natswitch in Malawi, the Zambia National Financial Switch, as well as GIMAC the regional switch connecting all countries in CEMAC.
The report’s insights were also derived from surveys and in-depth interviews with digital payment experts, end-users, and micro, small, and medium enterprises in urban and peri-urban areas of Rwanda, Cameroon, Malawi, Morocco, and Senegal.