Interoperability between mobile money and traditional bank accounts will serve as a key lever for financial inclusion for the millions of Africans excluded from payment systems.
This can be further enhanced by regulatory harmonisation efforts at a regional level.
These were some of the takeaways from a roundtable discussion hosted yesterday by Standard Bank Corporateand Investment Banking (CIB) in Rosebank, Johannesburg.
Standard Bank’s CIB team presented the findings of the 2025 Payments in Africa whitepaper, which outlines the defining trends shaping the future of financial transactions on the continent.
The big-four bank estimates that 400 million adults across the African continent do not have access to financial services.
For definition purposes, Standard Bank describes access to financial services as access to bank accounts from a traditional bank perspective.
This means transacting with a traditional bank account, which from an Africa perspective is not the majority of financial transactions taking place, explained Nthabiseng Mohale, head of interbank and domestic payments at Standard Bank CIB.
Instantly, seamlessly
According to the whitepaper, Africa’s shift towards digital payment modes is gaining speed.
This, as cashless payment volumes are expected to grow by 78% by 2025, driven by smartphone penetration, declining data costs and changing consumer behaviour.
“Over 70% of Sub-Saharan Africa’s population is under the age of 30. These are digital natives who demand instant, intuitive and seamless financial experiences. Biometric verification, contactless payments, QR codes and embedded finance are becoming the norm, not the exception. Mobile wallets alone are projected to account for morethan $314 billion in transaction value in Sub-Saharan Africa by 2025.”
While mobile money and fintech have accelerated financial inclusion, there is still a lot of work required to reach those 400 million adults categorised without access to financial inclusion systems.
Standard Bank’s insights highlight that mobile payments helped leapfrog traditional financial infrastructure, with over 80 billion transactions worth $1.1 trillion processed in Sub-Saharan Africa in 2024.
East African nation Kenya, which has one of the most successful mobile payment services − M-Pesa − processed close to 30 billion transactions in 2024. Meanwhile, countries like Nigeria, Ghana, Ethiopia, Senegal, Tanzania and Uganda processed around five billion transactions each, during the same period.
According to Mohale, Africa has 28 domestic instant payment systems across 20 nations, with a further 31 systems currently under development. These, she pointed out, have the potential to accelerate the development and implementation of the instant payments system.
“With the 28 systems that are currently operational, we can assume that instant payments are the key systems to accelerate financial inclusion and reduce some of the friction we’re seeing with the regulatory reporting on transactions from a cross-border perspective.”
This will also promote transactions being processed securely, cost-effectively and without friction, Mohale noted. “These systems also have the potential to promote competition and innovation.”
Standard Bank’s team believes instant payment capabilities have the potential to become the ‘heartbeat’ of Africa’s digital transformation.
“Reports focused on Nigeria show that in 2023, the instant payment system processed 82.1% cashless transactions. This means there is potential for us to go cashless, to reduce some of the cash we’re seeing in the system.”
The implementation of Kenya’s M-Pesa brought to light a system that orchestrates transactions between mobile money accounts, Mohale added. “Where we are seeing growth, we recognise there is a need for interoperability between the two systems. You cannot have growth in digital transformation if you have two systems existing solely on a mobile money account and solely on a traditional bank account.
“There is a need for us to create interoperability, to ensure consumers are able to transact in a bank instant payment solution that can transfer funds to a mobile wallet and vice versa.”
Speaking about instant payments at the regional level, the Standard CIB executive said out the 31 instant payment systems in development, 14 look to enable interoperability between the bank-owned as well as the mobile facilities. “From a regional perspective, such capabilities would accelerate some of the financial transactions and flows we’d like to see within the region.
“The birth of TCIB, which are transactions cleared on an immediate basis, and the birth of the Pan-Africa payments settlement system, are accelerating the regional requirement for systems that ensure harmonised regulation and acceleration of cross-border transactions that are frictionless. This helps promote the participation of other non-banked entities to then accelerate some of the offerings we see in the market.”
She pointed out that the emergence of fintech entities and collaboration with the banks have the potential to enable wallet-to-wallet capabilities from a cross-border perspective and ensure the touted interoperability.
“We see this as a powerful aspect for instant payment systems because it will promote transactions for all persons, without the confines of traditional bank accounts. For example, even if they only have a mobile wallet, they will be able to transact and be financially included.
“Inclusion is quite important, especially on the African continent. It is important to promote market innovation that is offered through the banks and non-banks, so there is that requirement for us to participate, collaborate and partner to deliver instant payments.”
Key among the bank’s observations is that mobile money is a main driver for financial inclusion, she stated. “We cannot achieve financial inclusion by just relying on the traditional bank accounts that we have today, but the growth seen in mobile money is a key of inclusion, tackling the 400 million adults that don’t have access to financial services today.”
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