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Africa’s population has historically been distrustful of electronic and online payments, preferring cash to pay for goods and services in a region where government regulation is notoriously lax. A lack of computer literacy, low levels of bank account ownership and a weak telecommunications infrastructure compound the problem. Although electronic payments aren’t as prevalent in Africa as in the rest of the world, things are changing fast, with Africa witnessing an influx of investment and innovation, along with welcome changes to legislation.
In 2020, Africa generated approximately $24 billion in digital payment revenues, of which around $15 billion happened domestically. However, on average, only around 6% of all financial transactions made in Africa were made electronically, compared to 50% in countries such as Turkey.
Africa’s online payments landscape is expected to grow by approximately 20% per year up to 2025, reaching a value of around $40 billion — significantly faster than the global average. M-Pesa, a mobile phone-based money transfer method, now has a strong presence in Kenya, where 58% of the adult population possess a mobile account. Meanwhile, current traditional payments providers such as PayPal have also begun their expansion into the region.
Egypt offers plenty of potential for e-commerce merchants, with online shopping valued at a massive $5.4 billion per year and growing at a rate of 12% annually. Like much of North Africa, the county’s 100 million plus population is relatively young and, despite internet penetration only recently passing 35%, Egyptian shoppers are increasingly keen to use mobile money platforms to make purchases online.
A recent survey by cybersecurity experts Kaspersky revealed an 89% rise in digital payments in Egypt, while another survey carried out by Mastercard found that nearly 35% of Egyptians had used an e-wallet during 2022.
Founded in 2008, Fawry is an e-wallet service used by millions of Egyptians, and describes itself as the “leading provider of e-payments, financial inclusion and digital finance solutions”. The service is endorsed by the Central Bank of Egypt and can be used to pay utility bills as well as for digital payments and online shopping.
Fawry users earn rewards when they make purchases, making the service particularly interesting compared to run-of-the mill digital wallets. For e-commerce merchants looking to expand into the Egyptian market, offering this popular and convenient online payment method is highly recommended.
Meeza is a local prepaid debit card and another popular payment method in Egypt that’s endorsed by the Central Bank and Government. Meeza cards can be used online and for point-of-sale purchases, and the platform offers a wide range of features and benefits. It’s worth noting that although Meeza offers various card payments with similar functionality to Mastercard or Visa debit cards, the service does not work internationally for cross-border payments and is restricted to Egyptian stores and e-commerce websites.
Like many countries worldwide, Morocco’s e-commerce sector grew significantly during the Pandemic and continued to expand through 2021, seeing a 48% rise in transactions. Credit and debit cards were used around 66 million times, both in physical stores and for online payments. Of the cards used online, 96% were locally issued.
According to Statista, in the fourth quarter of 2022, most online payments in Morocco were made using cash (usually in-store or on delivery). Payments by card and e-wallet accounted for 17% and 16% of the total bill payments' share, respectively.
Orange Money was launched in the Ivory Coast in 2008 and has since expanded throughout Africa, helping 45 million users access financial services by downloading a mobile app. Orange Money users in Morocco can make payments and transfers using their mobile phones and remotely pay for phone recharges. Users access their mobile money wallets via their phone numbers and can also withdraw funds from the Orange Money wallet at approved points of sale.
Like Orange Money, Inwi Money is a digital wallet for iOS and Android developed by a mobile communications provider. Inwi Money allows users to pay their utility bills, transfer funds, invoice and accept payments anywhere, and pay for goods and services online or at registered POS terminals.
Nigeria has the largest economy in Africa and the 24th largest economy worldwide. With a population of 200 million, 60% of whom have access to financial services, Nigeria offers significant e-commerce opportunities for businesses looking to expand into new markets. Nigerian digital payment solutions have surged over the past few years, partly driven by revised regulations and improved “Know Your Customer” (KYC) requirements for multiple payment methods.
Tingg is a popular all-in-one digital payments ecosystem backed by Cellulant and used in 34 countries, and it is especially popular in Nigeria. Tingg offers a digital platform allowing mobile users to make and receive payments while connecting businesses to mobile money accounts through an easily-accessible payment gateway.
Paga Wallet is a Nigerian mobile money provider that aims to provide un-banked and under-banked customers with digital financial services. Paga users can load their wallets with cash at 23,000 approved locations nationwide or via bank transfer. The Paga wallet can be used to make domestic money transfers, purchase goods online, make cardless withdrawals at ATMs or pay bills.
Only 38% of Ethiopia's population have bank accounts, while smartphone penetration is just 24%. Despite those relatively low figures, the total transaction value of the Ethiopian digital payments market is projected to reach $2.5 billion by the end of 2023, growing by over 16% per year.
Fettan was Ethiopia's first payment processor and is a mobile electronic payment platform enabling person-to-person and business payments and money transfers using mobile phones, the internet or smart cards. The Ethiopian Postal Service adopted Fettan for domestic money transfers, and the company is also responsible for the Moneta Payment solution "Amole", linking consumers, banks, merchants, and service providers to an electronic payment ecosystem.
YenePay is an account-based online payment platform for Android allowing Ethiopian businesses to sell and collect payments via smartphone. The app was created by the developers of Balesuk, an eBay-style e-commerce site tailored to the Ethiopian market. YenePay has four distinct products: YenePay E-commerce for online merchants; YenePay for smartphone users; YenePay E-invoice, and YenePay Bulk Pay — a means of making payouts to large numbers of accounts.
Like many African countries, cash is the most popular payment method in Kenya, accounting for 40% of online transactions. E-commerce use in Kenya is increasing rapidly and expected to continue its growth rate of 16% up to 2025 and beyond, with at least 24% of the Kenyan population now regularly buying products from online platforms.
PesaPal is an online payment method available in eight African countries including Zimbabwe and Zambia, but especially popular in Kenya. Much like Paypal, the service requires an email address for sign up and allows money transfers, POS transactions and mobile payments via the app. Several Kenyan banks are connected to Pesapal including Equity Bank and Cooperative Bank.
E-commerce in Tanzania is still in its early stages of development but has the potential to grow rapidly. Tanzanians are generally wary of paying online, with over 90% of online shoppers choosing to use cash-on-delivery payment methods. Poor infrastructure, a lack of organised addresses and low trust has also hampered e-commerce growth in the country.
Tigo is the e-wallet brand of telecom company Millicom. In Tanzania, their service is branded as Tigo Pesa. Users can load Tigo Pesa wallets at physical locations or via bank transfer. The service can then be used for sending money and transfers, to buy mobile phone credit, purchase goods online or in-person, or to pay utility bills. In 2019, Tigo launched a smartphone app giving access to over 300 government agencies and utility companies whilst unlocking the ability to make and receive payments via QR codes.
South Africa has seen an e-commerce explosion in recent years, growing at a rate of nearly 18% per year and now boasting a predicted revenue of $7.2 billion for the end of 2023, placing the country ahead of Romania.
According to one study, over 70% of South Africans shop online at least once per month. Most consumers cited convenience, time-saving, and COVID-19 restrictions as reasons for increased online shopping. The same report showed that clothing, electronics, footwear, household appliances and health products are the most popular categories amongst online shoppers in South Africa.
Unlike many African countries, international payment systems such as Visa are popular in South Africa, with credit cards representing over 40% of all online transactions.
Digital wallets are becoming extremely popular payment methods in South Africa and currently account for 17% of e-commerce transactions. Samsung Pay is the country’s most popular e-wallet and was used for over 2 million transactions in 2020, likely due to the company being the leading smartphone brand in South Africa. As well as many of the popular African mobile wallets mentioned above, Google Pay and Apple Pay also see widespread use.