49 Billion Transactions Were Processed Across The African Continent – SIIPS Report 2024

In the ever-evolving landscape of financial transactions, Africa is witnessing a significant surge in the use of Instant Payment Systems (IPS). The SIIPS 2024 Report reveals that 2023 was a landmark year, with 49 billion transactions processed across the continent—the highest volume recorded to date.

This staggering number underscores a broader trend: the shift towards digital, fast, and efficient payments is becoming a cornerstone of Africa’s economic growth. More importantly, the total value transacted surged at a remarkable average annual growth rate of 39% from 2019 to 2023, reaching over $1 trillion last year. Such figures highlight Africa’s increasing reliance on digital financial systems and indicate a seismic shift in how money moves.

In countries like Kenya and Uganda, IPS processed transaction values surpassing 100% of their Gross National Income (GNI), underscoring the critical role these systems play in national economies. Not-on-us transactions, a key metric indicating interoperability, also saw significant increases, with five countries reporting transaction values equivalent to 10% or more of their GNI. These numbers emphasize the growing integration and efficiency of cross-border and domestic transactions in Africa, facilitated by the proliferation of IPS.

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Mobile technology remains a dominant force, driving these changes. Since 2023, mobile-based channels have become the most popular means for IPS, with mobile apps surpassing USSD as the leading channel. At least 30 IPS now support mobile apps, indicating a shift towards smartphone-based transactions. This trend aligns with the increasing penetration of smartphones across Africa, providing a personalized user experience and allowing third-party technology providers, including fintechs, to develop innovative solutions. However, this shift raises concerns about digital inclusion, as reliance on smartphones could widen the gap between urban and rural users who may still depend on simpler, feature phones.

USSD technology, though overtaken, remains relevant, supported by 23 IPS due to its accessibility on feature phones. It allows individuals without smartphones to engage in digital transactions, which is crucial for reaching the unbanked and underbanked populations. Despite security challenges related to encryption, USSD’s continued use illustrates its importance in bridging the digital divide, especially in countries with lower levels of digital literacy.

Human-assisted channels, such as mobile money agents and bank branches, still play a crucial role in the ecosystem. These channels are available in 21 and 20 IPS, respectively. While more expensive to maintain, they are indispensable in markets where financial literacy is low, offering a human touch that reassures users unfamiliar with digital platforms. These agents act as vital conduits, facilitating the digital payment landscape’s expansion into areas that might otherwise remain inaccessible.

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Meanwhile, the development of QR codes, Point of Sale (POS) systems, and Near-Field Communication (NFC) technology is gaining traction. Although they are currently the least supported channels, with only 17 IPS supporting QR codes and seven supporting NFC, the potential for these technologies is vast. NFC, in particular, has seen a boost due to advancements in tap-on-phone technology, enabling easier and faster payments, which could reshape the retail and service sectors in the coming years.

The SIIPS 2024 Report also underscores the dominance of e-money instruments, supported by 20 IPS, over traditional credit and debit electronic funds transfers (EFTs), which are available in 18 systems. The preference for e-money highlights a broader shift towards mobile wallets and digital payment systems, reflecting the continent’s ongoing digital revolution. However, traditional banking services are not disappearing; instead, they are evolving, with many banks embracing digital platforms to remain competitive.

Peer-to-Peer (P2P) payments are universal across the 31 IPS surveyed, showcasing the strong demand for fast, person-to-person transactions. Person-to-Business (P2B) and Person-to-Government (P2G) transactions are also on the rise, supported by 24 and 19 systems, respectively. The P2B use case, crucial for smal