Since the start of the pandemic, digital payments have been on the rise on the African continent. As elsewhere, it helps to limit physical contact and reduce the risk of transmitting the virus. A number of countries have launched information campaigns aimed at the general public, to accompany a cashless boom that is more or less advanced depending on the country.
Very different realities in different regions
The African continent is three times the size of Europe, and the use of digital payments varies from country to country and region to region. Although cash is still the predominant form of payment, due to the low level of bank penetration, the level of cell phone equipment in families is one of the highest in the world.
In West Africa, mobile wallets, i.e. payment of transactions using a smartphone via Orange Money, for example, are developing rapidly, but are still only used by one adult in four. On the other hand, in East Africa, notably in Kenya, but also in Tanzania and Ethiopia, mobile payment is highly developed, thanks in part to the success of the M-Pesa service offered by operator Safaricom.
A boost from the coronavirus
In the midst of the Covid-19 crisis, many players are pulling out all the stops to facilitate the development of cashless. For example, many providers of digital payment solutions have reduced or eliminated transaction fees. The process has been simplified, and the barriers that may have existed in Africa, such as the need to provide proof of identity or proof of address, have been removed.
Governments and central banks are also encouraging the development of digital payments. Alongside the application of barrier gestures, governments are recommending mobile payments to limit contact. The Central Bank of Ghana has announced that all subscribers to a cell phone service can now benefit from a mobile wallet and transfer the equivalent of $170 per day without having to provide a receipt.
At the beginning of April, the Central Bank of West African States (BCEAO) announced several measures initially intended to remain in place for 30 days, but possibly renewable. These include free nationwide electronic money transfers below a threshold of 5,000 CFA francs, free payment of water and electricity bills via cell phones for amounts under 50,000 CFA francs, and more flexible conditions for opening electronic money accounts.
One thing is certain: the development of cashless in Africa cannot be achieved without a certain amount of education and a commitment to financial inclusion.