With international remittances playing an increasingly critical role in supporting families, education, healthcare and small businesses, customers are demanding solutions that are intuitive, transparent and cost-effective.

The Absa–Thunes collaboration responds directly to this need by combining Absa’s trusted Pan African banking footprint with Thunes’ agile Direct Global Network to deliver an end‑to‑end, real‑time money movement experience.

A simpler, faster, more intuitive customer experience

Absa Global Pay allows Absa customers to send funds directly from the Absa Banking App or Connected Banking (Absa Online) with instant settlement to 18 countries with 6 countries forming part of the first release (UK, Kenya, India, Malawi, Pakistan and Zimbabwe).

Customers can choose from multiple payout methods, bank accounts, mobile wallets or approved cash pick‑up points, with real‑time notifications and full transaction visibility for added confidence and control.

Affordability and transparency at the core

By leveraging Thunes’ trusted Direct Global Network and Absa’s scale across key African markets, the solution offers lower fees, clear pricing, competitive FX rates, and greater value, ensuring that more of each transaction reaches the families and businesses that depend on remittances as a financial lifeline.

Nick Nkosi, managing executive for Transactional and Deposits at Absa Personal and Private Banking, said:

“At Absa, we are committed to building financial services that are innovative, intuitive and deeply connected to the everyday needs of our customers. Remittances remain essential for keeping families supported across borders, and our research shows significant opportunity to unlock more value in this space. Together with Thunes, we are delivering a solution that is simpler, faster and more affordable — empowering customers with choice, transparency and meaningful value.”

Simon Nelson, chief commercial officer at Thunes, said:

“We are proud to partner with Absa, one of Africa’s most trusted financial institutions, to expand access to modern, low‑cost cross‑border payments. By combining Absa’s deep local insights with Thunes’ expansive Direct Global Network, we are making international money movement seamless and accessible for anyone, anywhere. This launch is an important milestone in our mission to support the growth of the continent by powering intra-Africa money movement and bring inclusive financial connectivity to communities across the world.”

A track record of multiple payment innovations at Absa

This product launch builds on a growing track record of several recent Absa payment innovations aimed at simplifying how customers interact with their money, from mobile-first solutions such as Absa Pay for online payments, a secure online platform allowing Absa customers to pay for their ecommerce purchases on a merchant site without sharing banking login details and most recently the launch of Bill payments in partnership with EasyPay and Pay@.

Trillions of naira move through these platforms every year, but are we as Nigerians truly the owners of this digital revolution, or are we simply feeding the machine?

The numbers look commendable, as mobile money operators, led by OPay, PalmPay, and others, processed over ₦71.5 trillion in 2024, up from ₦46.6 trillion the previous year. That’s a 53% surge in digital transactions in a single year. 

The total volume of transactions rose from 3 billion to nearly 4 billion, while Nigeria’s e-payment ecosystem crossed the mind-bending threshold of ₦1.07 quadrillion. Flutterwave, PalmPay, and OPay together are worth more than $6 billion. 

Moniepoint alone serves over 10 million customers, processing more than a billion transactions monthly. These platforms have become the arteries of Nigeria’s economy.

But look past the numbers and we see a worrisome picture. Most of these platforms are not Nigerian-owned, at least not in the full sense. They are backed, funded, and in many cases controlled by foreign investors who are ultimately the biggest beneficiaries of the profits. 

Nigerians generate the volume, carry the risks, and pay the fees, but the value extracted rarely stays here. Even Paystack, once a poster child of local innovation, now sits under Stripe, an American company.

The experience for everyday users is not always rosy either. High transfer fees eat into income, hidden charges appear without explanation, and platforms monetise data without ever asking for consent. In April 2024, the Central Bank of Nigeria (CBN) froze new customer onboarding for OPay, PalmPay, and Moniepoint over issues about compliance. 

Millions of users were instantly locked out, not because they did anything wrong, but because regulators and platforms were at war. That moment exposed a painful truth: Nigerians are passengers, not drivers, in this so-called digital economy.

The story is not limited to payments. Ride-hailing and e-commerce also have their part. Bolt is one of Nigeria’s leading transport apps, while Jumia has over four million active customers across West Africa, with Nigeria as its biggest market. 

But again, ownership sits elsewhere. These platforms dominate mobility and retail in Nigeria, yet the wealth created flows outward. Nigerians keep the ecosystem alive, the drivers, riders, buyers, and sellers, but who really profits at the end of the day?

So we circle back to the question: who owns Nigeria’s digital economy? Is it the millions of people who log in every day, building the data, trust, and traffic that keep these platforms alive? Or is it the platforms themselves, backed by capital far beyond Nigeria’s borders? 

On one hand, Nigerians are enjoying convenience, speed, and access like never before. On the other hand, we might be building wealth we’ll never truly share in, trapped in a cycle of dependency where platforms set the rules and people have little choice but to comply.

And that’s where the conversation must begin. Are we content to be consumers, or should we be demanding true participation and ownership? Should regulators create space for real local authorities, or will foreign-backed platforms continue to dictate the terms? 

Until those questions are answered, Nigeria’s digital economy will remain a paradox, built by Nigerians, but not necessarily for Nigerians.

The growing popularity of Pay@ among insurance billers is particularly significant for businesses like funeral parlours seeking to reduce on-site theft risks.

It provides customers with the flexibility to complete their transactions at retailers, via their banking app or an easy-to-use payment journey on their smartphones, contributing to a safer and more convenient payment experience. 

“Financial services are a significant enabler of social and economic development, especially at a time of economic uncertainty”, says Pay@ representative, Hendrik Blignaut. “This is why the banking sector is increasingly embracing digital payments through partners like Pay@. Applications of this partnership such as Capitec Bill offer a sustainable solution for collections, covering more remote corners of the country. Coupled with the rapid rise in smartphone usage, convenience can now play a more significant role in countering crime.” 

The role of a payment aggregator is to provide better customer experiences while enhancing safety to make payments a simple, and importantly, secure process.

The avenues opened are increasing at a rapid pace as it enables billers to offer their customers a wide range of payment options through in-store and digital channels, including subscription bills, money transfers, municipal accounts, insurance policies, and more.

The technology is specifically designed to meet the needs prevalent in the South African context, where even factors like loadshedding can impact the ability to pay online. Being able to pay in a store a customer visits anyway is both safer and more convenient.

“Pay@ has been a game-changer for our business. It has allowed us to offer a convenient and secure payment option to our customers, which has helped us differentiate ourselves from the competition and provide a superior customer experience,” says AVBOBs Rika Robbertse.

Insurance providers can leverage the advantages of a centralized platform that offers both convenience and security for their clients.

The payment aggregator displays bills in multiple formats and oversees the complete transaction process, making it an essential tool for the insurance sector.

Beyond physical pay points, the technology is firmly on track to leverage the growth of digital technology. In a country where smartphone usage is projected to grow in 2023, Pay@ recognised the importance of digital channels.

With millions of people in South Africa using smartphones and over 90 million mobile connections overall, Pay@ ensures that digital payment options are included in their offerings. Customers can also scan a QR code with their camera and enter their unique account number to access their payment details and make payments conveniently. 

Ensuring Safety and Security

There is undeniably a heightened focus on security and crime in the South African market. Providing alternate avenues to make payments, while employing state-of-the-art security measures, including encryption, to protect customer data and transactions, is vital.

This ensures that payments are always safe and secure, giving customers peace of mind about the security of their sensitive information.

According to Robbertse, “Ensuring the safety and security of our customers’ payments is a top priority for us. Pay@ provides robust security measures that give our customers confidence in making their insurance payments online.”

Convenience at its Core

Convenience is a critical aspect to both insurers and their customers. With a wide network of retail partners across South Africa, including popular chains like Pep Stores, Pick n Pay, Shoprite, and SPAR, customers gain instant access to thousands of locations to make payments. This eliminates the need for customers to travel to specific payment centres or bank branches, making it easier and more convenient for them to pay their insurance premiums on time.

Flexible Payment Options:

This inclusion of digital channels such as QR codes, direct EFT, and the ability to make payments within a banking app, gives customers the flexibility to choose their preferred payment method. This caters to varying preferences and access to different payment methods among customers.

Staying Ahead of the Competition:

For insurers a no-cost, online application process and onboarding ensures all relevant compliance and security measures are firmly in place. Once set up, Pay@ enables insurers to better serve their customers and stay ahead of the competition – as they attract and retain customers. As the payment landscape continues to evolve, Pay@ is set to play a crucial role in shaping the future of insurance payments in South Africa.

Online shopping is on the increase in South Africa, with a recent Deloitte study noting that up to 70% of the country is making purchases in this way.

With this rise in online payments, the risk of exposing personal and confidential information, such as banking login details, to third parties has also risen sharply. It’s therefore no surprise that 86% of people are concerned about data privacy and security.

Worryingly, criminals can now more effortlessly steal personal data when payments are made, due to the use of screen scraping, where sensitive customer banking information is taken during transactions.

This has even set off alarm bells at the Intergovernmental Fintech Working Group (IFWG) and the South African Reserve Bank (SARB). The IFWG has stressed the importance of taking greater action in the online payment space, citing that it is critical to balance consumer protection and innovation.

The risks can no longer be ignored, which is why open banking has emerged as a solution – one that must be considered by all financial institutions in the country.

The Source of the Scamming

In South Africa, consumers are heavily reliant on their mobile phones to shop online. However, in many cases consumers need their physical card on hand or have to switch between their banking app and the merchant’s site to enter their card details manually.

Additionally, some online stores don’t accept card payments due to the unaffordability of card commission fees and only allow Instant EFT payments, which force consumers to share sensitive bank account login details when paying online. Herein lies the risk.

This process exposes consumers to screen scraping which can allow harvesting of personal data.

Additionally, some instant EFT providers share customer information, increasing the concerns expressed by industry bodies.

Screen scraping businesses have full access to your internet banking and can mine personal information, including banking statements, debit orders, and salary.

The usage terms and conditions of some well-known screen-scraping businesses even mention that the personal data they harvest can be shared or sold. Making matters worse is that this harvested data is stored in the cloud and most likely in other countries.

Sharing internet banking login information is the equivalent of walking into a store, then handing your card and pin to a well-dressed stranger, allowing them to leave with it to withdraw cash on your behalf and return with the money, so you can pay the store – trusting that this is simply part of the payment process.

Compounding the concerns is Social Engineering, yet another risk factor consumers face, as they are manipulating and influenced by savvy hackers to hand over sensitive information through the phone, email and social media to gain illegal access. 

A Solution Open to All

To help address the need for secure EFT payments, Capitec enlisted Pay@, a leading payments aggregator in South Africa, to ensure enhanced security and convenience would be at the core of the Capitec Pay offering.

This collaboration led to the launch of Capitec Pay.  The solution makes full use of the alternative to screen scraping, Open Banking, which allows secure access for payment providers to request payment from a customer. In this scenario, there is no stranger able to take advantage of gaps or loopholes.

A proof of concept (POC) was launched in February 2022 after Pay@ processed the first successful Capitec Pay transaction in December 2021. The POC provided secure payments to over two million Capitec customers in South Africa during the last 12 months and offered a trusted alternative to sharing their card or banking login credentials with third parties.

Essentially, customers can make payments directly by simply opening their Capitec banking App and approving the payment.

The Application Programming Interface (API) implemented by Capitec enables third-party providers to securely initiate payment requests to Capitec clients, while allowing them to choose the account they want to pay from and authenticate the payment safely through the banking app.

The need to use screen scrapping is alleviated.

The Results are Remarkable

Since the launch, there has been exponential growth in the number of transactions processed month-on-month via Capitec Pay.

The rapid adoption rate highlights that a need is being addressed. To achieve it Pay@ played the role of the bridge to the consumer, reacting swiftly to feedback and implementing changes to fully test the capabilities of Capitec Pay API.

This allowed Capitec to experiment in a safe and controlled manner. Pay@, already an enabler for billers and their customers for the payment of bills including satellite tv, municipal bills, telco accounts, insurance, or traffic fines, has used the Capitec collaboration to develop their technology even further.

According to Pay@’s Clinton Leask, “It’s essential that consumers not only feel protected from fraud, but actually are. Working closely with Capitec by securely testing efficiency and measuring success rates, we have taken a massive stride forward to securing the details and livelihoods of South Africans.

It is a level of care that we have also implemented with EFT payments that are shielded from data breaches.

We believe that collaborating with banks to better secure their customers is vitally important to the economy.” Additionally, Capitec has further enabled Pay@ to process payments directly in the Capitec App under the Pay Bills section.

Expanding the Concept is Vital

While reviewing screen scraping, regulators such as SARB have proposed policy changes in respect of open banking.

 According to SARB’s November 2020 paper, “a new class of third-party providers, with access to customers’ financial information, should be introduced to improve offerings for customers, increase competition, and promote innovation. ‘Good’ permissible open-banking practices must be distinguished.” 

The Financial Sector Conduct Authority (FSCA) expanded on this view in their 2020 survey to uncover sentiments and perspectives around financial data.

They concluded that before consumer financial data is shared, informed consent between the consumer, financial service provider and third-party provider needs to have been obtained. Consumers need to be fully aware of terms and conditions of what they are consenting to and how their data will be used to serve them.

Clearly, policymakers, development partners, governments, and financial institutions must work together to develop more inclusive financial services for all South Africans – with security right at the top of the list of priorities.

Currently, nearly one in four South Africans are unbanked, with cash seen by many as safer or even more affordable. To enhance accessibility and instil trust, more inclusive financial service technologies must be introduced. For the over 11 million people that already use Capitec’s digital channels, Capitec Pay and the innovation that comes with it, translates into a banking experience that’s safer, secure, and infinitely more accessible. Pay@, through Capitec Pay is fully utilising open banking by harnessing the convenience of unique facial biometric scans and cardless online payments.

“Pay@ was progressive in their understanding of the payment industry and had the foresight to see how our product idea would solve a shared problem. They were willing to test the customer journey and their willingness to switch. This has proven to be a complete success. Our collaboration on Capitec Pay led to invaluable learnings, which helped to significantly improve the product and client experience to reduce drop-offs and abandonment rates, increase first-time conversions and very importantly, reduce the likelihood of fraud, “said Capitec’s Jerome Passmore.

The fact is, financial services are a significant enabler of social and economic development and therefore policymakers, development partners, governments and financial institutions alike need to work together to make strides in developing safe and secure products, especially at a time of economic instability.

It is critical to continue the evolution of fintech innovation, with regulators working hand in hand with financial institutions to decrease fraud, while finding new pathways to greater financial inclusion in the economy.

As banks continue to work with fintechs, the industry can focus on greater levels of transparency, informed consent and data security. Ultimately, with the industry rising to the risks, fintech innovation can safely unlock a new world of infinite possibilities.

Every successful retailer knows that to nurture customer loyalty and establish a strong brand, you have got to perfect four key considerations: product, price, place, and promotion.

First introduced in the 1950s, these are old principles, but they remain essential in understanding the foundations of the retail industry. However, in the South African market, where consumer income and spending habits are vastly different to those in Europe or America, it is becoming important that we add another ‘P’ to the retail matrix: payments.

When we talk about product, this refers to the range of goods and services your customers are looking to buy. As a retailer, your job is to stock those that will satisfy the customer’s needs wants and desires, while also delivering a profit to your business.

Your profit is largely influenced by the price you set. How much you charge per item needs to be consistent across the whole marketing and sales mix, and it also needs to make financial sense (i.e., present value) to both the buyer and seller. Next, a retailer needs to provide a space where customers can purchase their products.

Typically, this is a physical store, however, as more people gain access to the internet, and as global events like the COVID-19 pandemic drives the uptake of eCommerce, retailers across the world are adopting online marketplaces to supplement how they sell their goods. Finally, once all this has been determined, it is up to the marketing team to start promoting the offering.

Except, things do not end there. Once a customer has been convinced of the product, price, placement and promotion, the final hurdle is payment – specifically, the process and experience through which money is transferred from the hands of the consumer to the retailer.

In foreign markets where consumers have more disposable income and where spending habits are more informed by desire than necessity, the payments process is often sidelined as a supplementary issue.

But in South Africa, where some 30-million people (or 55% of the population) live below the upper poverty line, and where large groups of society do not have access to traditional financial services, consumer spending depends on the customer’s ability to transact in a way that is both affordable and accessible.

Now, this is important because at the end of the day, a retailer’s goal is to drive traffic to their store and maximize basket sizes.

This can be achieved by manipulating the principles of product, price, placement, and promotion – except, this all means little if the customer is not financially or functionally able to make that final payment. South African retailers must then consider how different payments methods can help bridge this gap between buyer and seller.

It is because of this gap that Africa has experienced a fintech revolution. Across the continent, new and innovative ways for consumers to transact and handle their money are always emerging – from solutions like Zapper and SnapScan, which allow the continent’s mobile-first population to pay for goods using QR codes on their smartphones, to one-stop apps like those of Capitec Bank, eWallets by First National Bank, and transnational remittance startups like Hello Paisa and Mukuru.

These companies offer retailers myriad new ways to service their customers, however, the vast variety of options available can often leave retailers unsure of which to adopt.

It is for this reason that payment aggregators like Pay@ have emerged. These organisations group various payment channels together, and in doing so, do not only take the pressure off of retailers to independently integrate a never-ending range of options, but also ensures they do not lose out on potential customer transactions.

But like the fintech’s they support, payment aggregators are constantly changing to meet the needs of both retailers and end-customers.

This is specifically in the area of bill-payments, as retailers have looked to provide an in-store alternative for customers looking to pay for traffic fines or television subscriptions.

This all goes back to the founding principles of retail and is a deliberate move to incentivize more foot-fall and bigger basket sizes. In response to this, aggregators are now integrating billers and merchants into their offerings, and in doing so, are evolving into payments platforms.

The beauty of a payments platform is its ability to not only digitise payments in physical retail spaces but also drive traffic to retailers’ digital platforms. Throughout the pandemic, the going consensus was that – thanks to restrictions on movement – the online retail industry boomed. This is true; eCommerce witnessed the sharpest growth in its history, as more and more consumers recorded their first online transactions. This was beneficial for businesses too, who could use this uptake in online shopping to generate customer data and better align their four ‘P’s.

But what the conversation often ignores is that this did not equate to the end of in-store retail. Rather, their status as an ‘essential service’ meant that operations went on mostly as normal (baring the face masks, sanitisers and longer queues). At the same time, unable to see friends and family, consumers relied on retail to practice some sense of community.

This trend persists in the post-pandemic world, with industry insights showing that, despite the widespread foray into the digital world, consumers still prefer the brick-and-mortar experience.

These findings are especially true in smaller and underserviced towns in South Africa, where online access is constrained and where citizens prefer a community-based shopping experience.

Combined with less income to spend and little trust for digital systems, retail continues to dominate these areas, with consumers simply more accustomed to transacting in person via a human teller.

With inflation, rising fuel prices, and ongoing loadshedding putting additional pressure on households’ limited incomes, community-based retailers can expect to see consistent traffic at their physical stores in 2023 and beyond due to their ease of access. But higher prices will not only be a concern for consumers.

For retailers, inflation can wreak havoc on their product strategies, and it is for this reason that we are likely to see more uptake of payments aggregators and platforms over the coming months.

This is because, by grouping together various methods of transacting, aggregators and platforms unlock bargaining power for retailers, whereby payments are grouped and do not incur the fees linked to administration, staffing, and customer service, among others. As such, the adoption of these services gives retailers another tool in their box  when finding cheaper suppliers or transferring the higher costs on to the end-consumer is not an option.

These are just some of the predictions we can expect to see unfold in the retail payments landscape over the course of the year.

However, considering that the industry is so intrinsically linked to movements in the national and international markets, it is also worthwhile pointing out that the situation can change at any given moment.

This can make it increasingly difficult for businesses to predict the future and align their four ‘P’s accordingly. But one thing is clear: by adding payments aggregators and platforms to the mix, retailers are better equipped to deal with the worst, and capitalise on the best.

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No longer the stuff of science-fiction, Artificial Intelligence (AI) has captured the attention of South Africans across the board. In fact, it would be difficult to scroll any news or social media platform without finding at least one reference to the likes of ChatGPT or DALL-E.

ALSO READ: ChatGPT’s Impacts will be Social, not Technical

These platforms have wowed users for their ability to synthesise large amounts of data and generate written articles and digital artworks in seconds.

More importantly, they have sparked widespread discussion (and fear) around the potential impact that AI will have on a range of industries – from those in creative fields, to finance, engineering, and more.

The payments industry has not escaped this debate. While opponents worry that automation and machine learning will lead to job losses, proponents believe that the technology will act as a great enabler, ushering in the next wave of improvements to the way that consumers and businesses alike make transactions and manage their financial lives.

The industry has already begun to see the latter emerge, with innovations such as AI chatbots enabling a more proactive and deeply personal form of customer experience. Beyond this, AI also promises to improve efficiencies, remove errors and lower costs by automating routine processes, as well as unlock new and previously unrealised opportunities based on an improved ability to process and generate insights from vast amounts of user data, gathered via digital payment channels.

Evidently, AI can go a long way towards addressing several challenges in the payments ecosystem – and more so in South Africa, where the industry continues to grapple with limited access to traditional banking services, low levels of financial literacy, and a lack of trust in digital platforms. However, it would be naïve to believe that the technology will revolutionise the industry overnight. Rather, there are several challenges which first need to be overcome for AI to play a larger role in the South African payments landscape.

Cash will always be king (for now)

A primary challenge facing AI in South Africa will be the region’s reliance on cash, which will continue to be a primary form of exchange as it allows immediate participation in the economy for all, including people living in rural areas or foreign nationals without formal documentation or bank accounts. In this regard, cash is unmatched in its ability to provide speed, flexibility, anonymity, and affordability as legal tender.

It is also this physical nature of cash that inhibits the uptake of AI, which relies on large amounts of data, which in turn can only be generated at mass through digital transactions.

When consumers make payments online, the businesses that facilitate and process these transactions are able to track a myriad of data points – from the date, time, location and amount paid, to more granular details such as the amount of time a user spends at a specific step of the payment process.

Together, this information can be processed by computer algorithms to paint a very detailed picture of the user’s experience and inform the payment provider on how to adjust their systems.

High data costs will lead to less data generation

Digital payments have, however, seen a surge in popularity in South Africa, thanks in part to the uptake of fintech in recent years, the proliferation of mobile devices, and the COVID-19 pandemic, during which consumers became more accustomed to transacting online.

In fact, data from the World Bank has shown that, during the pandemic, more than 40% of adults in low and middle-income economies like South Africa made a payment online for the first time. In doing so, South African consumers have greatly expanded the potential for data generation – but this is unsustainable if high data costs persist.

As the price per megabit of data has decreased in developed countries, a combination of lower income levels, limited infrastructure, and a lack of competition in the telecommunications market – coupled with high taxes and tariffs on mobile devices and services – has seen data prices remain relatively high in Africa.

This is no different in South Africa, where consumers pay an average R78.50 per gigabyte data while their counterparts in the United Kingdom pay only R37.12 for the same amount. This will in-turn force many consumers to resort to more affordable payment channels, such as cash.

In an effort to overcome high data costs, many retailers and merchants have looked to alternatives such as zero-rating their marketplaces or investing in Unstructured Supplementary Service Data (USSD) services to make it easier for consumers to transact online.

Good examples can be found in organisations such as Pay@, a leading payments aggregator in South Africa, offering merchants and consumers alike a range of payment methods via integrations in the zero-rated Capitec Banking App and MTN Momo, among others.

By making it more affordable for users to transact online, these platforms are able to generate data which can be used to power AI.

SA’s energy crisis isn’t helping

Regardless of data costs and consumer habits, the uptake of AI in the South African payments industry cannot escape the current energy crisis.

While mobile phones rely on batteries, sustained and high levels of loadshedding will affect their rechargeability and longevity, with outages also impacting the speed, coverage and performance of telecommunications infrastructure.

Together, this severely limits the use of digital devices and the ability of consumers in a mobile-dominated market to make payments online.

Unable to use their electronic devices, consumers will have no other option than to fall back to traditional means of exchange – such as using cash in physical retailers – who are able to maintain payment systems by providing generators and other forms of electricity supply.

Together, the interlocked challenges associated with long-standing consumer preferences, high data costs, and an ongoing energy crisis present significant barriers to the short-term uptake of AI in South Africa. But this is not to say that the technology will not break new ground in 2023. Rather, players in the payments sector can expect AI to take subtle steps towards optimizing internal processes and workflow, before being implemented on a customer-wide basis.

About Carel Botha. Business Development, Key Strategic Partners

With more than 12-years’ experience in the financial services industry, Carel has a deep knowledge and understanding of a range of industry-related issues, including sales, analytics and financial management. He holds a BCom (Hons.) in Business Management from the University of Stellenbosch, as well as an MBA in Business Administration & Management from Henley Business School.

What’s more, nearly 90 percent of negotiations on product-specific rules have been concluded, covering more than 70 percent of intra-African trade.

But while the foundations for enhanced exchanges between African markets may be laid, the emphasis is now on implementation, which demands that attention be placed on the continent’s payment landscape.

Among other things, AfCFTA is set to reinvigorate economic activity in markets across the continent.

In doing so, analysts at the World Bank believe that AfCFTA will lift 30 million people out of extreme poverty and raise the incomes of 68 million more, thanks in a part to higher levels of intra-African trade, which is set to generate a combined consumer and business spending of $6.7 trillion by 2030.

But as inter-governmental conversations around exchange controls and non-tariff barriers to trade begin to conclude, implementation is now becoming key. In that vein, it is important to acknowledge that – to reach these anticipated levels of spending, and in turn improve incomes and quality of life – consumers across the continent must have access to the relevant tools and technology required to participate in the world’s largest free trade market. Specifically, we need to support their ability to make payments, which has been the lifeblood of commerce since the earliest forms of exchange first emerged.

The provision of payment tools and technology is paramount in the African context, where 57% of the African population do not have a traditional bank account.

To address this challenge, developments in Africa’s payments landscape have been steered by collaboration between banks, telcos and fintech startups, to deliver new products and services in a more cost-effective manner for existing customers. 

To this end, innovation and partnerships in African payments is helping to drive frictionless transactions and enhance borderless financial services across regions.

At the same time, regional payment systems are starting to be deployed across the continent, in a bid to allow payments to flow from one system to another and provide pan-regional settlement capability. One example of this is the ‘Tripartite Free Trade Area’ between the East African Community, the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA).

In addition, the recently launched Pan-African Payment Settlement System (PAPSS), which has been designed to enable instant payments across African borders, will further drive this trend towards payment system interoperability.

These are welcomed developments, which are undoubtedly playing a key role in driving market integration across the continent.

However, to sustain this merging of African consumer bases – and to secure the ability of Africans to consume in the AfCFTA environment – we need to reflect on the continent’s sheer diversity in culture and circumstance and take note of the fragmented payments landscape that sees different communities, countries, and whole regions transacting in vastly different methods.

To fully realise the potential of the AfCFTA to stimulate consumer spending, contribute to economic growth, and enhance the quality of life then requires that African consumers be afforded a range of payment solutions to enable transactions across borders in methods that appeal to their different preferences and demands.

This will in turn promote financial inclusion, which will see more Africans able to engage with the enormous market opportunity that is the AfCFTA.

This has been the core mission of companies like Pay@, who have recently expanded their footprint across Africa, which seeks to promote financial inclusion and drive socio-economic growth.

This is achieved by developing tailored payments solutions – including mobile, card and smartphone payments, EFTs, wallets, and more – to African consumers, and in particular, those that find themselves in under- and unbanked communities.

The South African National Payments System (NPS) is regarded as world-class, as the banked population rose from 77 percent in 2017 to 80 percent in 2018. However, regardless of the strides that the NPS has contributed to the South African payments industry, a significant number of people remain unserved.

There is a demand from South African consumers for a diverse offering of convenient and secure payment methods.

In addition to the convenience that comes with tailored payment solutions, the provision of diverse payment solutions plays a pivotal role in creating inclusion in the payments sector. 

The National Development Plan Vision 2030 of South Africa acknowledges financial inclusion as an essential tool to eliminate poverty, inequality, and unemployment. When businesses grow, their aim is to attract more customers, however, they also aim to retain the customers that they already have in their market.

Hence the need to offer new and innovative payment options, both digital and physical, to serve the underbanked and unbanked market in South Africa.

Even though customers are familiar with the existing payment methods, they want to see change and development in their payment options over time.

Therefore, by offering more payment options, businesses have the opportunity to attract more customers across new markets.

Developments in technology has encouraged the payments industry to develop faster with the focus on efficiency, transparency and a better customer experience. However, the underbanked and unbanked market in South Africa remains a market which requires unique and trusted payment solutions.

By opening up themselves to exploring payment solutions that are tailored for their customers, businesses also contribute to their revenue generation through the opportunity to access new markets.

For this reason, Pay@ is at the forefront of navigating this unchartered territory within its payments network.

Pay@ contributes to the provision of secure, convenient and tailored payment solutions by partnering with businesses to bridge the gap for the unserved community.

The underbanked and unbanked market significantly contributes to South Africa’s economic growth, however, financial freedom for this market is often hindered by the lack of access to tailored and inclusive payment solutions.

South Africa’s unemployment rate climbed to 35.3% in the fourth quarter of 2021, up from 34.9% in the previous period. 

This meant that people had to look into alternative means of making a living, such as turning to the informal sector. As we move toward an inclusive economy in efforts to move our country to a more diverse and equal country, we have to avail payment options for those communities that are not served.

Organisations within the payments sector should offer solutions that allow consumers to pay all their bills in one easy and secure method, allowing them the freedom to go about their daily business. Cash remains king but digital payments is a rapidly growing channel. Hence, bill issuers need to make available payment options via retailers, banks, telcos, and fintechs. As new developments come to the market so too should bill issuers expand their portfolio of offerings. An example being Pay@ is also venturing into open banking payment solutions such as the Capitec pay method, which filters out the effort of consumers taking time off and travelling to make payments.

Along with partners, Pay@ continues to adopt innovative payment technologies and tailor payment solutions to create financial inclusion for our consumers.

Many sectors saw an uptick from a payments perspective, sustained despite impediments to business such as looting, loadshedding, port and rail disruptions, and further waves of COVID-19 infections.

Hopefully this bodes well for further economic upturn for the country’s economy in 2022, says Andrew Hardie, CEO of Pay@, one of Southern Africa’s leading payment solutions providers.

Hardie unpacks some of the trends that took shape throughout 2021:

Sectors show signs of recovery

Some sectors took a tumble at the onset of the pandemic but showed an uptick in 2021. These included the tourism industry, which posted 43.5% year-on-year growth in 2021, despite travel restrictions and concerns among travelers over contracting the virus or facing cancellations.

Money transfer type payments have posted a significant increase during 2021. These transactions first increased during 2020, when closed borders meant the market could not access informal transfer methods such as taxi and bus drivers delivering cash to loved ones in other countries. People have continued to send money during 2021, and this activity increased further following the period of looting and riots.

Pay@ services a large portfolio of insurance companies and Hardie notes how insurance payments have continued to grow, in particular life and funeral insurance payments.

Payments start pouring in

One of the industries hardest hit in terms of bill payments at the height of the COVID-19 lockdowns was debt collection. But in 2021, the debt collection category increased by 30% year on year, which could result from consumers having more financial certainty in 2021.

Municipal payments also showed recovery as the economy began to normalise in 2021. We saw municipal payments increase by 12% year on year, but growth remains slow as many South Africans still prioritise other bills such as school fees.

The payment of traffic fines is still far from pre-pandemic levels, but payments have started to increase. We saw a 24% year-on-year increase in traffic fine payments.

In-store payments remain highly relevant and digital growth surges

People have always relied primarily on cash and cards for bill payments, but 2021 has brought increased digital payments. While cash and cards will still drive payments for some time, especially in the retail space, we’ve seen a substantial increase in the volume of payments by digital presentment methods.

This includes wallets by telcos and retailers, payments via QR codes and contactless payments through cards, phones and smartwatches.

These digital payment methods are only going to become more popular with the marked increase in e-commerce. Debit and Credit card payments as well as EFT push transactions have become increasingly sought after for payment s in the online space thanks to a change in consumer behaviour during the pandemic.

In response to the surge in online payments, Pay@ is enhancing its card offering, with card-on-file capabilities, which allow for one click payment s or the ability to run recurring transactions easily. Our solution offering is backed through Visa and Mastercard Tokenization security which ensures that card details are kept safe and secure.

Pay@ is also working with banks such as Capitec, Nedbank and FNB to introduce direct EFT Application Programming Interface (API) links into these banks.

The direct EFT API’s offer the best experience for end customers and allows for transactions to be directed into the banking channel for the customer to approve without needing to use a third-party instant EFT payment provider to access their account or to do a beneficiary payment.

Finding a future fit

Pay@ continues to see the value of providing its numerous payment options to businesses. Businesses need to incorporate digital payment methods alongside the traditional use of cash and card and it is becoming increasingly important for billers to find the right bill presentment medium for their customers.

Hardie concludes by saying that for industries to continue to grow transaction volumes businesses need to provide customers with a myriad of safe and convenient ways to pay. “Now more than ever, efficacy around the collection of bills is critical for the liquidity of businesses.”