eBusiness Weekly
Moving money between neighbouring African countries using traditional payment systems often requires sending it around the planet.
It is an absurdity that new, tech-driven solutions intend to avoid.
These solutions are easier to use and more efficient than traditional systems, but challenges remain.
Payment solutions must be flexible, and they can’t operate like current systems that require beneficiaries to carry some of the cost. Cheapness by itself won’t drive adoption either. Consumers will embrace a slightly more expensive yet transparent process faster than one that is inexpensive, yet obscure or slow.
Balancing these factors is crucial.
Sending money should be as simple as pressing a couple of buttons and seeing the funds in the beneficiary’s account almost instantly.
Network effects
Besides a simple user-interface, ease-of-use also relates to the size of the network the payment-solution is plugged into.
There’s no point in having a simple process if only a few people in a few places can use it. Zimbabwe — and its estimated three million citizens living in South Africa — presents an example of the potential complexities of the challenge.
Cash is scarce in Zimbabwe and, as a result, the country has adopted mobile and digital payments. However, workers trying to send money home still rely on the beneficiary’s access to cash wherever they receive payment.
What is needed is the ability to transfer funds that a beneficiary can spend digitally in Zimbabwe’s shops and with its service providers.
The challenges are
not technological
The technology required to underpin fast, transparent and cost-effective mobile payments infrastructure exists. The real challenge is one of design and effective network-building so millions can use it across the continent’s 54 countries.
The companies that end up dominating will be those that manage to form alliances and connections between financial institutions, governments, outlets and telecoms firms.
Traditional banks with pre-funded accounts are best placed to drive initial adoption, despite the promise of fintech disruptors.
A new dawn for payments
in Africa and the world
Progress has been rapid. A new age of payments infrastructure is about to dawn across the Continent.
Africa is not the only place with patchwork, archaic and inefficient cross — and intra-border payments infrastructure.
The continent’s advanced telecoms infrastructure and lack of traditional banking services make it the ideal proving ground for systems that could end up transforming the entire world.
Those that get it right now will gain a critical advantage in this up-and-coming industry. — 702.com
