New Report Looking At The Instant Payment Systems In Africa Launched

A new report on the state of inclusive instant payment systems in Africa has been launched in Addis Ababa, Ethiopia. Africa Nenda has launched the report with the World Bank and the United Nations Economic Commission for Africa.

Known as SIIPS 2023, the report explores the evolution of both the supply and the demand side of instant retail payments.

At the same time, it highlights the challenges and opportunities shaping Africa’s payment landscape to equip stakeholders with the insights they need to motivate investments, partnerships, and progress toward inclusivity.

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This year’s edition highlights further developments in the IPS landscape and includes a spotlight on cross-border retail payment policy and regulatory harmonization in Africa.

“Findings in this year’s study reinforce the fact that to achieve inclusivity, the payments landscape must enable a wide range of channels, payment instruments, and use cases. Today, e-money instruments are the most dominant, person-to-person (P2P) payments are the primary use case, and USSD is the most-used channel.

As was the case last year, no IPS yet qualify as mature, and most meet only basic-level inclusivity criteria, though the five IPS that meet the criteria for being “progressed” are on their way toward full maturity.

While several barriers to widespread payment acceptance remain across access, early adoption, and habitual usage, policy and regulatory harmonization can help to overcome some of them to enhance seamless cross-border payments,” said the report.

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Instant Payment Systems (IPS)

These are retail payment systems that are multilateral—and open loop—and that enable digital push payments in near real-time for use 24 hours a day, 365 days a year, or as close to that as possible.

Inclusive instant payment systems (IIPS)

This is a process of retail transactions digitally in near real-time and is available for use 24 hours a day, 365 days a year, or as close to that as possible. They enable low-value, low-cost push transactions that are irrevocable and based on open-loop and multilateral interoperability arrangements.

Licensed payment providers have fair access to the system, and participants have equal input opportunities into the system. The central bank has a role in system governance. End-users have access to a full range of use cases and channels, as well as transparent and fit-for-purpose recourse mechanisms.

The Snapshot 

According to the report, there are 29 live domestic systems across 21 countries and three live regional systems. This diverse landscape has relatively few new IPSs, though that is to be expected since IPSs take multiple years to implement and often require extensive industry and/or regulator consultation and technical expertise.

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“For IPS in Africa to increase access for all citizens and form an effective payment layer in digital public infrastructure, systems will need to improve in sustainability, customer value proposition, provider value proposition, and policy,” said the report.

DOWNLOAD THE FULL REPORT HERE