Instant Coffee, Instant Payment and Ladder to Africa’s Economic Growth

I love the smell of brewed coffee but my father was a devotee. Each morning coffee aroma would waft through my nostrils, waking me, and picking me up for school.

While instant coffee comes in light brown granules, regular coffee is deep black. Father kept packs of both in his tea drawer. Instant coffee is popular because of its convenience and it contains less caffeine. Brewed coffee does not.

Like my father, you can mix instant coffee in a big mug with hot water and fly away. Regular coffee is not that simple.

Many of my older friends are die-hard-brewed coffee drinkers and they have developed palates for coffee. I have not and do not intend to do so.

However, health experts say the two types of coffee have similar benefits. One contains more caffeine. The other has less caffeine. If you consume the two in moderation, your heart will love you.

On the one hand

If you receive instant payment for services, you will smile. Like instant coffee, convenience is at the core of instant payment. A new report has corroborated this fact.

Let us check it out. The taste of the pudding lies in the number. The State of Inclusive Instant Payment System (SIIPS) 2023 reported that Africa processed 49 billion transactions in 2023.

On the other hand

In 2020, Africa’s instant payments industry, across domestic and cross-border payments, generated approximately $24 billion in revenues. $15 billion came from local payments. 47 billion individual transactions totalled over $800 billion.

In the long term

The report explores the evolution of the supply and demand of instant retail payments. It highlighted the challenges and opportunities shaping Africa’s payment landscape to equip stakeholders with the insights they need to motivate investments, partnerships, and progress toward inclusivity.

SIIPS stated that the huge number underscores a broader trend. There is a shift towards digital, fast, and efficient payments.

This is becoming a ladder to Africa’s economic growth. The report showed that there are 31 operational instant payments in 26 countries. The 27 is on its way.

The figure is growing at 37% in volume over five years. While digital payment adoption surges, barriers remain for vulnerable groups, especially women, who face security and fraud concerns.

Despite progress, no system has fully achieved inclusive access, affordability, or transparency. The report emphasized the need for collective efforts to expand instant payments in rural areas.

To ensure universal financial inclusion by the year 2030. Globally, instant payments are booming. The industry is attracting more investment than any other financial services sector. It has delivered the highest returns.

The total value transacted surged at a remarkable average annual growth rate from 2019 to 2023, reaching over $1 trillion last year. Such figures highlight Africa’s increasing reliance on digital financial systems and indicate a seismic shift in how money moves.

According to a 2022 McKinsey report, The Future of Payments in Africa, factors driving instant payment in Africa include young, urbanized consumers and strong economic fundamentals. Africa has the fastest population growth rate in the world.

It averages 2.7 per cent per year, compared with a global average of 1 per cent. Africa has the youngest median age of 20 years. Consumers in Africa are benefitting from an increase in the proliferation of alternative payment methods. Local and international fintech and telecom players are offering these methods.

GSMA said about 1.2 billion mobile money accounts existed in 2020. This is close to the population of the continent.

In sub-Saharan Africa, about $2 billion transactions occur daily. Infrastructure investments are helping to accelerate instant payments domestically and across borders.