In this piece, Omokehinde Adebanjo, Vice President and Area Business Head for West Africa for Mastercard, looks at the evolution of banking and how it will impact business and social conduct, especially in Africa.
It will come as no surprise that banking has changed dramatically: advancements in technology and increased uptake of mobile have seen us move to a world beyond cash, where the potential to create solutions that make payments faster, simpler and safer than ever before is massive.
This is particularly true in Africa, where digital payments have acted as drivers of growth and financial inclusion.
The sheer value of digital and mobile solutions cannot be underestimated, both in terms of streamlining business processes and its ability to bring the continent’s citizens into the financial mainstream for the first time in their lives.
Research carried out by McKinsey, for instance, found that digital finance solutions have the ability to lower the cost of providing financial services in emerging economies by between 80 and 90 percent – illustrating the power of technology in overcoming social and economic challenges.
In order to unlock the full potential of digital solutions in driving inclusion and improving business and social conduct, Mastercard has partnered with governments, businesses, civil society organisations, merchants, developers and other pioneers to implement payment solutions that will make a real difference to businesses and their customers across Africa.
The continent has seen the introduction of a broad range of new technology that has revolutionised the way they transact and use their money.
Masterpass QR, for instance, has been launched in 33 markets in Africa and is expected to help bring 100 million Africans into the formal economic fold by 2020. As the largest implementation of a digital payment solution so far, Masterpass QR has acted as an enabler of the biggest engines of development and growth in Africa: micro, small and medium enterprises (MSMEs).
MSMEs account for almost 50 percent of GDP in Nigeria, and approximately 70 percent in Ghana, showing the importance of these types of businesses in West Africa and the need to facilitate and streamline their operations – which is precisely what Masterpass QR was conceptualised to do.
First introduced in Nigeria, the mobile-driven Person–to-Merchant (P2M) payment solution solves the problems that millions of MSMEs and their customers have faced for years.
The simple and secure application removes the need for expensive point-of-sale infrastructure for MSMEs, while simultaneously eliminating the need for customers to carry cash in order to pay for the goods or services they purchase.
Instead, the solution harnesses the power that the majority of African are already carrying around in their hands – the mobile.
Further taking advantage of the popularity of mobile is the MPOS solution in Nigeria. It enables merchants in the MSME sector to accept efficient and safe mobile payments from customers that previously paid with debit, credit or prepaid cards.
The solution marks the evolution of the payment ecosystem by effectively turning smartphones into point-of-sale terminals, making it easier for customers to make payments than ever before.
MPOS and Masterpass QR are just two examples of solutions that are already changing lives, in terms of the way business is done and in solving challenges that have prevented financial inclusion – and they only mark the tip of the iceberg in Mastercard’s journey to remove the barriers that keep Africans excluded from the financial mainstream.
As long as cash remains the biggest obstacle to financial inclusion, Mastercard will continue to partner with like-minded individuals, businesses and governments to introduce solutions that change that.
It is only through collective action and a commitment to transformation that any difference can be made.
Mastercard is well aware of this, and has dedicated extensive resources and time to ensure that measurable growth is achieved through consistent advancements in payments.
Africa is undoubtedly a continent of both challenge and opportunity: its people remain hindered by a lack of inclusion – the fact that only 34.2 percent of adults have an account is stark testament to this – but at the same time, companies have recognised the need for proactive change and are working to ensure that that statistic is brought down and that all citizens benefit from more accessible, effective and secure financial tools.