Why Africa’s Payment Landscape Is a Mosaic of 100 Markets – Opportunities & Strategies

African Payments – Is the Market Worth Pursuing?

2024 digital payment transaction volume reached $195.5 billion and is projected to grow to $314.8 billion by 2028, a CAGR of 12.65%.

Growth is driven by mobile money and e‑wallets, especially in Sub‑Saharan Africa.

One Big Market or One Hundred Small Ones?

The continent is a collection of many fragmented markets rather than a single uniform market.

East Africa: Kenya’s mobile money accounts for >50% of GDP; West Africa: Nigeria’s e‑payment volume grew 298% in 2023 but cash remains dominant; South Africa: mature card network with high inequality.

Licensing Landscape

Regulatory environments are complex and vary by region.

East African Community (EAC): Kenya’s licence is partially recognized in Tanzania and Uganda.

West African Economic and Monetary Union (UEMOA): BCEAO issues a unified licence for eight countries.

Southern African Development Community (SADC): licences are country‑specific.

Nigeria: Central Bank licence is the most valuable and hardest to obtain.

Key Players

Telecom giants: Safaricom (M‑Pay‑Sa) dominates East Africa; MTN Mobile Money leads in user base across West and South Africa; Airtel Money in Uganda and Zambia.

Bank‑centric players: Standard Bank, FirstRand in South Africa serve high‑end customers.

FinTech newcomers: Flutterwave (Nigeria, $3 bn valuation), Paystack (acquired by Stripe), OPay, PalmPay (backed by Chinese capital), and Chinese firms such as Tecno/Infinix/Itel with pre‑installed PalmPay.

Crypto: Used as a grey‑channel in countries with strict FX controls (e.g., Nigeria, Zimbabwe).

Monetisation Paths

Cross‑border remittances – Africa has the highest remittance fees (≈9%); providing low‑cost channels is lucrative.

Agent networks – offline agents are crucial for user acquisition and cash handling.

Top‑up and utility payments – mobile‑top‑up is the entry point for most users.

B2G – governments are digitising pension and subsidy payments.

Localized e‑commerce payment for Chinese sellers on platforms like AliExpress, Temu, SHEIN.

Technical Playbook

Design for offline verification and post‑sync; keep mobile apps ≤1 MB; support multi‑currency settlement (USD, EUR, XOF, ZAR) with real‑time rates.

Strategic Advice

Focus on regional adaptation rather than a single model.

Partner with local telecoms, banks, and agent leaders.

Prioritise offline distribution over pure online growth.

Build a dynamic compliance team to navigate fast‑changing regulations.

Accept that disrupting M‑Pesa is unrealistic; aim to complement existing ecosystems.

Conclusion

The African payment landscape will likely settle into several regional champions connected via APIs. Success belongs to those who understand regional differences, build strong offline networks, and adapt technology to local constraints.