Standard Bank has seen the number of payments to mobile wallets in Kenya on behalf of its clients increase by 300% in 2013 with both Kenya and Nigeria leading other African nations in terms of the adoption of mobile payment technology.
This is a growing trend that is helping the two countries introduce more unbanked citizens to formal financial services according to Sachin Shah, Head of Cash Management Products at Standard Bank.
In Nigeria, Standard Bank has started a mobile payments pilot project with two clients and facilitated over 4bn naira worth of payments this year, putting it at the forefront of the country’s central bank policy of promoting a cashless society.
“As a percentage of the population, Kenya and Nigeria are really leading the way in terms of the adoption of mobile payment systems in Africa. Nigeria’s sheer scale and the early adoption of the systems in Kenya means however that both countries are well placed to leverage this growth potential and the associated benefits,” said Shah.
“Multinational corporations operating in Africa are increasingly looking at ways to eliminate the risk of carrying and transporting cash and the use of mobile wallets to facilitate cashless payments is a cost-effective and efficient way of doing this.”
Multinational corporations in the fast moving consumer goods (FMCG) sector are particularly interested in rolling out mobile payment solutions as it allows them to distribute their products in remote areas without having to take the risk of transporting cash, said Shah. Standard Bank is helping to facilitate the adoption of mobile payment technology by establishing partnerships with telecommunications companies across the continent.
According to Wayne Cook, the Product Head for Cash Management, CFC Stanbic Bank in Kenya, Mobile payment is becoming a valid substitute for carrying cash in many parts of Africa and we’re even seeing foreign aid agencies utilising this payment method to conduct their day to day activities.
“It’s an easy and safe way to ensure that funds reach their intended recipients, which make it an ideal solution for companies that have large workforces requiring weekly or monthly wage and salary payments.”
Shah says Kenya has only 1 500 bank branches countrywide compared to more than 40 000 mobile payment agents that facilitate the exchange mobile money for cash and vice versa.
Standard Bank expects the gap between the number of bank account holders and mobile wallet holders in Africa to continue to widen over the next two to three years, as more telecommunications companies roll out technology that facilitates mobile payments.
“The conversion from mobile wallets to formal bank accounts will follow as soon as other capabilities like loans, savings and insurance can be made available through the mobile phone,” said Shah.
“Ultimately this will increase access to financial services. That in turn opens up the opportunity to offer increased access to savings accounts, personal loans and even mortgages over time.”