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FIS Horizons

2020 is likely to be another eventful year in the Financial Institutions Sector. The question is, how do we address – and even embrace – this change and how do we make the most of the opportunities that change brings?

PSD2 & GDPR: an opportunity for the African mobile payment business?

Africa is the leading continent in mobile money with over 60% of the world’s mobile payment accounts located south of the Sahara.

Mobile money allows payments and transfers with a mobile phone, without a bank account or internet connection. This medium has been embraced in those African countries whose traditional banking infrastructure has a low penetration rate and is characterized by scarcity of bank branches and ATM machines, especially in rural areas, and by higher costs of banking services (including account holding fees). In 2017, mobile money transactions amounted to 20% of Sub-Saharan Africa’s GDP and less than 2% of Europe’s GDP. Mobile money is typically used for low-cost transactions, primarily to send and receive remittances, but also to pay utility bills, wages, school fees and agricultural products. East Africa has been the most dynamic region with Tanzania, Kenya, Uganda, Zimbabwe and Rwanda as the top 5 countries when it comes to mobile transactions, followed by West African Ghana and Côte d’Ivoire. The mobile payment infrastructure was developed and is still led by telecommunications companies whose market shares range from 45% to 70% depending on the countries.

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