New payment methods, incl. BNPL, in Africa set to continue with strong growth
The global daily value of mobile money transactions in 2022 surpassed forecasts to hit $3.45 trillion, according to a latest mobile money industry report, while in East Africa, the number of transactions grew by 18%.
The report by Global Systems for Mobile Communications Association (GSMA) also shows that in 2022 the total value transacted on mobile money platforms grew by 22% to hit $1.26 trillion. In East Africa, 41 million new mobile money accounts were registered last year, growing the total value of transactions to about $491 billion, which is 23% higher than in 2021. “Our data shows that the habit of using digital payments, enforced by the pandemic, has stuck, leading to mobile money activity growth outstripping new registrations in many countries,” said GSMA Director-General Mats Granryd. But the biting cost of living didn’t drive uptake of mobile money services only. The latest data by Statista shows that other digital payment solutions are also on the rise, as people look for cheaper ways of transacting online.
In 2022, new payment platforms including Buy Now Pay Later (BNPL), cryptocurrencies and central bank digital currencies (CBDCs) also posted record levels of transaction values, posing stiff competition for mobile money platforms. BNPL platforms recorded transactions worth $112 billion last year, which is expected to grow to $437 billion over the next five years. Examples of such platforms in the region are Lipa Later in Kenya, Jazika in Tanzania, Moovah in Uganda and Nxt in Rwanda.
According to a recent report by ResearchAndMarkets, BNPL payments in the Middle East and North Africa (MENA) region are expected to grow by 29.1% on an annual basis. The BNPL payment industry in the MENA has recorded strong growth over the last four quarters, supported by increased e-commerce penetration. Medium to long term growth story of BNPL industry in the MENA remains strong, with BNPL payment adoption expected to grow steadily over the forecast period, recording a CAGR of 17.8% during 2023-2028.
