Google Wallet launches in SA amid booming digital payments usage in Africa
Alphabet Inc launched its Google Wallet in South Africa on Tuesday (23 August), after rival Apple Inc introduced its Apple Pay mobile payment system in the country last year — a sign that the tech giants try to gain a foothold in the continent’s rapidly growing digital payments space.
The COVID-19 pandemic has accelerated the shift to digital transactions and people increasingly prefer making contactless payments via their smart devices. The Google Wallet app stores a consumer’s credit or debit card information and allows shoppers to pay for goods by tapping their phone against a retail store’s point of sale at the checkout counter. In recent years, Africa has experienced a rapid proliferation of digital instant payment solutions. Last year, the continent accounted for 70% of the total value of mobile money transactions globally.
However, many of the digital instant payment solutions are not interoperable with each other, and even less so across borders, argues a briefing paper recently published by ECDPM, a Brussels-based think tank. As Africa works towards building the African Continental Free Trade Area (AfCFTA), interoperability of cross-border instant payment solutions will be vital to increasing trade. Furthermore, ensuring cross-border interoperability of low value instant payment systems, notably mobile money, will be an essential step in making sure that the AfCFTA is inclusive, and that its benefits can extend to small-scale traders, many of whom are women. The cross-border interoperability of payment platforms across Africa is important and international partners such as the EU should support African efforts in this regard, the briefing paper concludes.