Africa is the second largest continent by both area and population, its population exceeded 1.5 billion in 2024 and is expected to rise to 2.5 billion by 2025. Africa already leads the world in mobile payments accounting for 70% of the global $1 trillion mobile money market, a clear sign of where investors are headed and a testament to Africa’s remarkable capacity for innovation.
When the COVID 19 pandemic brought lockdowns and social distancing measures to much of the globe, digital channels became an everyday use. That sudden shift to online and mobile services played to Africa’s strengths by accelerating the adoption of mobile wallets, contactless payments and use of e-commerce, and by opening opportunities for innovators across the continent.
M-Pesa as the start of mobile payments in Africa
Regarded as one of the world’s successful mobile money services, M-Pesa, launched in 2007 and now serving over 60 million customers and 5 million businesses, proved that financial transactions could run entirely on mobile phones. It became the model for countless digital payment solutions. By allowing users to store and send money without a traditional bank account, it quickly gained traction among countryside communities. That success then led to a wave of mobile money deployments across Africa, introducing alternative banking services that closed access gaps and expanded financial integration.
The rise of payments innovation on the African continent
Africa is a large continent with over 50 unique nations. However, over the last few years, certain developments have had an impact across most countries. For example, the increasing affordability of smartphones has played a crucial role in the growth of digital payments. This has expanded access to mobile banking and payment apps, facilitating financial transactions for a growing number of people.
Africa has become a hub for FinTech innovation. Startups such as Flutterwave, OPay and Chipper Cash are developing innovative digital payment solutions tailored to local needs. These solutions include peer-to-peer payment platforms, remittance services, and digital wallets, making financial services more accessible to individuals and small businesses.
Africa’s future in e-Commerce
Digital payments have fueled the growth of e-commerce in Africa. Online marketplaces and platforms have emerged, providing opportunities for businesses to expand their reach and allowing consumers to access a wider range of products and services.
According to Nanyang Technological University, Africa’s e-commerce is poised for more growht:
- 2023: 435 million online shoppers.
- 2024: 476.5 million online shoppers.
- 2025: 519.8 million online shoppers.
Card scheme growth in Africa
Visa and Mastercard, the leading card schemes in Africa, have built decades of growth dating back to the economic expansion of the 1990s. They steadily upgraded the digital payment infrastructure by partnering with local banks, issuing more cards, and working with merchants across the continent to boost acceptance.
The rise of mobile money services in Africa opened fresh avenues. Card networks teamed up with telecom operators to blend mobile money balance with card payments, launching prepaid cards, contactless solutions and digital wallets, and backing local FinTech’s as the market evolved.
Compliance and persistent challenges
Despite card scheme growth in Africa, challenges remain. Inconsistent internet coverage, uneven infrastructure, complex regulatory regimes, and rising cybersecurity risks each create opportunities for innovation and investment in a more resilient payment system.
Regulators across multiple African markets have strengthened or introduced a suite of compliance measures to enhance transparency security and consumer trust, including:
- Enacting or enhancing Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) laws to combat illicit financial activities: Enacting or enhancing Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) laws to combat illicit financial activities: South Africa’s FIC act 38 of 2001 created the Financial Intelligence Centre and Advisory Council, which requires AML duties, including risk assessments, transaction monitoring, and reporting of suspicious activity.
- Adopting data protection and privacy laws to safeguard personal information handled by digital payment providers: Nigeria’s Data Protection Regulation issues by NITDA under the NITDA Act 2007 establishes consent requirements, data subject rights, breach notification requirements, and agency oversight for all personal data.
- Requiring transaction reporting and monitoring of large or suspicious transactions to track financial flows and identify potential risks: Under the Money Laundering Act 2011 and CBN’s AML/CFT regulations, Nigerian financial institutions must file Currency Transaction Reports for any single transaction above ₦5 million for individuals or ₦10 million for companies and submit Suspicious Transaction Reports to the NFIU within 24 hours.
- Introducing licensing and registration requirements for payment service providers to ensure compliance, consumer protection, and risk management: In Kenya, PSPs must secure formal authorization and registration under the National Payment System Regulations, implement comprehensive governance structures and AML controls, embed clear consumer protection policies, and maintain robust frameworks to manage operational, credit and cyber security risks.
Signifying the evolving landscape
As the digital payment landscape continues to expand, the focus on security measures is expected to increase significantly. The implementation of compliance measures is likely to become more prevalent and stringent, offering substantial benefits to customers, merchants, and card schemes alike. This heightened emphasis on security and compliance will foster a safer and more reliable environment for conducting digital transactions, instilling greater trust and confidence among all stakeholders involved.
As compliance measures grow throughout the African continent, G2 Risk Solutions looks forward to partnering with more businesses in the region, contact us to find out more.