Following our successful London Summit in October 2019, IAMTN’s focus switches to the African continent. In April 2020, we are returning to Cape Town to bring together the region’s payments innovators, disruptors and stakeholders to tackle the challenges and discuss the opportunities in the evolving remittance space.
The dates for the IAMTN Africa Summit 2020 have been confirmed. The new decade’s first major gathering of industry leaders will take place at Cape Town’s stunning Radisson Blu Hotel Waterfront on 22 and 23 April.
In recent years, Cape Town has emerged as a significant financial services centre in Africa. Five major South African banks (First National Bank, ABSA, Standard Bank, Nedbank and Capitec) now have offices in the city and a number of renowned investment and financial advisors, such as PwC and Investec, are based there. It’s also one of the four African cities – along with Johannesburg, Nairobi and Lagos – that Findexable recently listed in the top 100 cities worldwide for fintech businesses.
The Africa Summit will welcome many of the country’s financial services and fintech innovators, as well as participants from across Africa and indeed the wider world. The packed two-day agenda will look at the latest developments in payments and wallets in South Africa and the cross-border regional platforms that are currently transforming the wider African payments landscape. We will also drill down into the many cashless initiatives across the region, the latest regulatory updates and the benefits that innovation and fintech collaboration brings to the table.
Mobile money marches on
One hot topic at the Africa Summit will be the continued growth and impact of mobile money, which is revolutionising the remittance experience. Disruptive fintech innovations, such as Safaricom’s M-PESA and other mobile money systems, are helping to boost financial inclusion. Some remittance recipients, for example, may opt to take the cash out from their mobile wallets when they receive the funds, but they also have the ability to stay cashless and use digital money in their transactions. Digital remittances are undoubtedly a big step towards democratising financial services.
According to figures from the World Bank, remittances to Sub-Saharan Africa (SSA) are set to increase by over 5.6% between 2019 and 2020, reaching $51 billion. However, the region is still the most expensive in the world to send money to.
The best way to bring down these costs whilst also increasing accessibility is to tap into the exponential growth of mobile device use. According to a recent GSMA (Global System for Mobile Communications) report, by 2025 half the population of SSA will subscribe to mobile services. That will be over 600 million unique subscribers. In 2018, according to the report, mobile technologies and services generated 8.6% of GDP (gross domestic product) in SSA, a contribution that amounted to over $144 billion of economic value added. The mobile ecosystem also supported almost 3.5 million jobs.
SSA is therefore a hotbed for mobile money services. By the end of 2018, there were 395.7 million registered mobile money accounts in the region, representing nearly half of total global mobile money accounts. Mobile money is about more than just the technology – there are around two million ambitious agents currently active compared with 100,000 or so brick and mortar banks.
Dare Okoudjou, Founder and CEO of pan-African fintech MFS Africa and a speaker at our upcoming Africa Summit, believes that mobile money has demonstrated a powerful impact in financial inclusion, poverty reduction and micro enterprise across Africa.
“What we expect to see in 2020 and beyond is a continuation of cross-border interoperability and a densification and strengthening of regional ties alongside that,” said Okoudjou. “Mobile money, with its ubiquitous reach and intuitive similarities to GSM services, is perfectly positioned to strengthen cross-border trade in Africa. We will see more and better mobile money-centric solutions for MSMEs, using the rails that were established for person-to-person remittances. We already know that borders do not limit people’s communication, entertainment, relationships, or aspirations. We believe borders should not limit the scope of your business, either.”
In the longer term, he believes that mobile money termination will become a basic requirement for all MTOs, rather than a differentiator for a few. “More entrants will appear, taking for granted that instant connectivity to dozens of networks and countries is possible through a single API.”
Forging new partnerships
In December 2019, MFS Africa announced a partnership with Visa that will help to bridge the gap between the rapidly growing mobile money sector in Africa and the latest capabilities in online digital payments.
Whilst mobile money wallets are prevalent across Africa, without a virtual or physical network credential associated with them, many international online services are unavailable to users. The partnership will help to solve this problem, with MFS Africa distributing Visa payment credentials across multiple markets in Africa.
This will allow mobile money users connected to the MFS Africa platform to generate an instant Visa virtual card with a 16-digit number and link it to their mobile money accounts to use for remittances and e-commerce transactions. MFS Africa will also integrate Visa’s real-time push payments solution Visa Direct to provide users with a faster, convenient and more secure way to send and receive money and remittances directly from, or into, their mobile money wallets via eligible card credentials.
“MFS Africa is Africa’s first non-bank principal member of the Visa network, licensed to issue virtual cards backed by the mobile wallets on our network,” said Okoudjou. “This is a truly exciting partnership for us, and a game changer for the remittance and e-commerce space in Africa.”
“We see the African fintech landscape as primed for consolidation, with some natural partnerships emerging across verticals. MFS Africa recently made an investment in ag-tech company Akorion, whose EazyAgric app leverages mobile money to support smallholder farmers. We predict a lot more collaborations of this nature in the future.”