Despite rapid advancements in instant payment systems (IPS) across Africa, significant gaps remain in achieving true financial inclusivity, according to the State of Inclusive Instant Payment Systems (SIIPS) Report 2024.
Released in collaboration with AfricaNenda, the World Bank, and the United Nations Economic Commission for Africa (UNECA), the report highlights barriers such as affordability, accessibility, and transparency that continue to hinder vulnerable populations, including women and rural communities, from fully benefiting from digital payment systems.
With 31 systems operational in 26 countries and 27 more under development, the report warns that these advances have yet to fully address the needs of vulnerable groups. Women and rural populations, in particular, continue to face barriers, including concerns over security, fraud, and unreliable networks.
The absence of effective recourse mechanisms exacerbates these challenges, leaving underserved communities hesitant to embrace digital payment solutions.
Over the past five years, IPS transaction volumes and values have grown by 37% and 39%, respectively, fueled by mobile phone adoption, regulatory support, and fintech innovations. However, the systems’ limitations in inclusivity remain significant.
“Access to safe, low-cost, and efficient digital payments can bridge the gender gap, enhance financial resilience, and foster economic growth,” said Jean Pesme, Global Director of Finance at the World Bank. “While progress is evident, more must be done to develop new use cases, promote fintech, and engage the private sector.”
The SIIPS Report, produced in collaboration with AfricaNenda, the World Bank, and the United Nations Economic Commission for Africa (UNECA), identifies key areas for reform, including:
- Fintech Licensing: Driving innovation through streamlined regulatory frameworks.
- Gender Inclusivity: Addressing gender disparities in digital payment adoption.
- Cross-Border Integration: Building interoperable systems to align with the African Continental Free Trade Area (AfCFTA).
Stephen Karingi, UNECA’s Director of Regional Integration and Trade, underscored the importance of interoperability and trust in building a connected Africa. “Aligning IPS with the AfCFTA and Agenda 2063 is essential for fostering economic integration and prosperity,” he said.
Dr. Robert Ochola, CEO of AfricaNenda, stressed the need for collective action to expand IPS and tailor it to the needs of underserved populations.
“The goal is to ensure universal financial inclusion by 2030, a vision that could be realized if the 27 planned IPS initiatives are successfully implemented,” Ochola said.
The report integrates data from IPS operators, central banks, and consumer research in countries such as Algeria, Ethiopia, Guinea, Mauritius, and Uganda. Case studies from Mauritius, South Africa, Tanzania, and Zimbabwe provide insights into the digital payments landscape, while expert interviews highlight persistent barriers.
As Africa builds the digital infrastructure needed for seamless cross-border payments, the report emphasizes that collaboration between public and private stakeholders will be critical to realizing the full potential of IPS. By addressing current shortcomings, IPS could transform financial inclusion, fostering resilience and growth for millions of underserved Africans.
