Factors that impact consumer adoption of mobile banking. Average size of transaction for cheque, eft and mobile payments in madagascar 2017 42. Payments study tour report 2019 payments association of south. The impact of the 4th industrial revolution on the south. Africa, namely southern africa,east africa and west and central africa. To gauge the evolving state of cash in south africa and dig into why mobile payments are struggling to gain adoption, pymnts recently caught up with vusi ndwandwe, head of retail and business banking at absa bank.
Historically, south africa s payments system was rated amongst the best in the world. Subsaharan africa is a continent with significant problems on the one hand and great potential on. Thandile gubevu and darrell beghin, for facilitating the overall project exercise and the useful comments on the draft report that helped shape the format of. The terms mobile payments m payments and mobile commerce mcommerce are also used, but these usually refer to the use of mobile phones to make retail payments and persontoperson transfers only. South africa and the regulation of mobile money please.
Can agency banking improve financial inclusion in south africa. Mobile banking differs from mobile payments, which involves the use of a mobile device to pay for goods or services either at the point of sale or remotely, analogously to the use of a debit or credit card to effect an eftpos payment. The services able to be offered through mobile money, including remittance and mobile payments bill payments and merchant payments are constrained in south africa through regulation primarily due to the stipulation that emoney can only be issued by a bank and the definition of deposit limits the ability to offer mobile payments without a partnership with a bank. The payment of funds by a customer into a mobile money account would constitute a deposit in contravention of the banks act because the openloop system allows the depositor to withdraw the deposit or any remaining funds, on demand. More recently, the country has recognised the need for continuous payments modernisation to support the national. Sponsor content by a new wave of mobile payment tech is creating a cashless south africa.
Unfortunately, this is a systemic education problem within south africa that cannot be addressed in the shortterm. Oversight issues in mobile payments international monetary fund. A new wave of mobile payment tech is creating a cashless. Riding the wave of the digital revolution one of the great advantages africa has over other continents in riding the disruptive wave is that theres far less legacy to get in the way than in other regions, creating a clean sheet on which companies can develop their own distinctive business models.
To gauge the evolving state of cash in south africa and dig into why mobile payments are struggling to gain adoption, pymnts recently caught up with. Apr 27, 2017 south africas poor are particularly vulnerable due to widespread financial illiteracy, exacerbating the sense of mistrust and levels of exploitation fostered by these practices. The impact of the 4th industrial revolution on the south african financial services. Cape town is just one of the cities in south africa that is fast embracing mobile payments technology. South africa s immigra on problem, viewed may 2016. Mobile phone banking and lowincome customers evidence from south africa. When it comes to payments in south africa or africa, in general, cash is still a king. In our first edition of payment developments in africa, we offered a forwardlooking perspective on the payment. As leaders in african payment solutions for more than 10 years, we are in the process of linking up primary african card and mobile payment methods in more than 15 african countries which will all be available to you through a single integration. Whether it is for booking travel, buying online, paying back loans, or sending money to friends and family, payments need to be made.
It highlights differences among the 4 countries and their financial regulatory environment. Jun 30, 2017 to gauge the evolving state of cash in south africa and dig into why mobile payments are struggling to gain adoption, pymnts recently caught up with vusi ndwandwe, head of retail and business. That is why we have developed this series on payment developments in africa. The future of payments in south africa enabling financial. Nov 27, 2018 i define innovation as solving problems, like the real problems we have in africa. Oct 28, 2012 the sleeping giants of african mobile payments 7 years kenyas mpesa is the poster child for mobile money services in africa, but it is also increasingly gaining attention further abroad.
Mobile payments growing in africa, india and the u. The growth of mobile payment systems in continental africa is skyrocketing at an astounding rate. Dec 07, 2016 cape town is just one of the cities in south africa that is fast embracing mobile payments technology. I define innovation as solving problems, like the real problems we have in africa.
Mtn has cancelled its mobile money service in south africa. Mobile money services typically offer a subset of the following services peer to peer money transfers p2p, remittances domestic and or international, bill payment receipt, salary disbursement receipt, retail payments, and money storage savings. Emerging markets are hungry for technological innovation, and the imf says that africa is poised to be the epicenter of mobile payment adoption. The region now accounts for over half of the 277 mobile money services worldwide and is investing in new developments in the use of mobile money. In regions where financial inclusion is limited, such as subsaharan africa, mobile money promises a lowercost, more scalable alternative to traditional banking. Within the subregions, west and east africa record the lowest ratios of 20% and 21% respectively, while southern africa records a relatively high ratio of 43%, driven mainly by the high financial depth of south africa. Of these, p2p tends to be the most common offering. Includes primary credit or charge cards used in this country.
African payment solutions how multinational ecommerce. Pdf mobile payment services in south africa matthias b. In addition, mobile money operators do not seem to have, apriori, a good sense for which factors will determine the ultimate success of a deployment. The global payments landscape is rapidly changing and south africa is set to face a period of unprecedented change over the coming years. Investment position manual, which includes a new definition for personal. South africa s poor are particularly vulnerable due to widespread financial illiteracy, exacerbating the sense of mistrust and levels of exploitation fostered by these practices.
Mobile money the next wave of growth 3 mobile money the next wave of growth is the latest in a series of ey reports on developments and opportunities in the market for mobile payments and related services. Dr penelope hawkins feasibility pty ltd and, for the purposes of this paper, finmark trust final paper for the african development finance paper abstract financial inclusion, as measured by the percentage of consumers using. The south african end user environment has marked differences to those. The sister company of mobile health clinics, mobile schools health, delivers preventative healthcare services to underresourced primary schools across south africa.
The mobile payments landscape and its opportunities. Sudan, somalia, tanzania, and south africa are not far behind. Following mobile moneys rise in africa, mobile banking is. Primary constraints along the property market value chain 40 figure 12. Instead of cash and credit cards, mobile payments allow customers to use a mobile device, which many people carry everywhere, to pay for goods and services. Harare townships and spaza shops in south africa have access to a new mobile payment system, days after vodacom announced that its shutting down its mpesa business. Pdf the challenges of implementing electronic payment. Consumer adoption of mobile banking has been slow when compared to the rate of increasednumber s of the cell phonesubscriber base in south africa. Companies whose business models are based on mobile payments have shown how targeting some of the worlds poorest customers can pay off. Pdf the mobile phone banking idea was initially born out of the intention to reach the. Value and volume of mobile money transactions from january 2016 to february 2018 33 figure 11.
Culture of nonpayment threatens stability of municipal. Next came india, a vast country of 600 million mobile users where the company had partners and a presence. Payment systems in zimbabwe bank for international. Mobile is the payment technology that will have the greatest growth over the next five years. The sleeping giants of african mobile payments techcrunch. Home research statistics balance of payments international trade in goods and. In conclusion, mobile payments are a strategic opportunity for banks, both as a defensive play against new entrants, as well as a growth prospect to convert cash into electronic transactions. Oct 06, 2016 emerging markets are hungry for technological innovation, and the imf says that africa is poised to be the epicenter of mobile payment adoption. Oversight, risks, mobile payments, payment systems. In 2002, only 3 percent of people in the entire continent had mobile phones. The study also sought to identify the extent of use of mobile and internet banking in financial institutions. China, japan, portugal, south africa and the united kingdom and had the assistance of staff.
The tieup of kenyas mobile sensation mpesa with paypal and western union, coupled with the joint venture between two of the largest cellular operators mtn and orange for a mobile wallet that operates across networks have capped a year that has seen significant developments in africas already blooming mobile payments market. A ca e cc b building today, a better africa tomorrow. May 29, 2012 this statistic illustrates the number of mobile payment users in africa from 2009 to 2011 with forecast for 2016. In the study tour reported on here, which a number of south african participants conducted to. According to the source, the number of mobile payment users in africa in 2011 was 54.
Mar 12, 2015 any startup with few millions of dollars in funding can jump in preeminence in the region because africa has a poor pool of companies. Banks also issue credit cards which are affiliated to either the visa. Vodacom had introduced mpesa in south africa in 2010 but it canned the product in sa this week as only 70 000 customers took up the service. Feb 20, 2014 if you look at mobile payments specifically, africa is actually one of the leaders in this space, says kobus ehlers, cofounder of the snapscan app. Research report on mobile money in south africa finmark trust. Number of mobile payment users from 2009 to 2016, by region. Balance of payments international trade in goods and. Top 3 benefits of mobile payments in africa mobile.
The problem, though, is that while jumia and others may be successful by. In addition, there are various other manual clearing houses in the country areas which. This study sought to determine the impact of mobile and internetbanking on performance of financial institutions in kenya where the survey was conducted on financial institutions in nairobi. We believe that, by sharing our insights and knowledge, we can help drive africas payments journey. Africa is the global leader in mobile money, which has become an important component of africa s financial services landscape. To compete in africa s diverse mobile money markets, banks must offer distinctive mobile and digital services not only in payments and deposits, but across the spectrum of financial services. Mobile payments system the challenges to its adoption in. There are 3,186 companies in the continent in all sectors.
South africa methods of payment south africa methods of payment discusses the most common methods of payment, such as open account, letter of credit, cash in advance, documentary collections, factoring, etc. The previous reports in this series, in 2009 and 2011, focused mainly on emerging technologies and the various types. Fill out the form on the right to learn more about the mobile payments market in africa. Africa is wellknown for its ascendancy in the newest form of electronic payments, and this year saw the rise of a new form of mobile banking, particularly in south africa where several new mobile. Now more than twothirds of people in five of africas major mobile phone markets, namely south africa, nigeria, kenya, ghana and uganda, own a mobile phone and access the internet via their mobile phones. In this regard, the reserve bank has therefore undertaken to actively coordinate the development of the payment system and to work closely with banks in implementing the national payment system project nps project. Mobile money services design and development for financial. Mobile financial servicesoften called mobile moneyare a high priority for many mobile operators, financial institutions, technology firms, and governments.
Alberts college, ernakulam, kerala abstract mobile banking refers to provision of banking and financial services with the help of mobile telecommunication devices. The department of economics, university of the western cape uwc, south africa, where the model was presented would like to incorporate it in its. South africa cameroon kenya tanzania benin zimbabwe mali uganda. Mar 31, 2015 what stops mobile money payments in south africa. Hattingh referred to the finance ministers budget speech, where he highlighted that the director general will be issuing a directive to all government departments and public institutions to pay suppliers on time, or be charged with financial misconduct.
Mobile health clinics providing mobile health clinic. Regulatory impact on mobile money and financial inclusion. Regulatory impact on mobile money and financial inclusion in. Includes creditrating and collection agencies in this country. The prediction anticipated that the growth rate in china global noncash transaction volumes analysis. And solving those problems solves them for the rest of the world. The mobile payment industry isnt void of its own share of challenges, and inactive customers are the chief contributors to one of the problems faced by providers in africa. Policy on the reproduction of images of south african currency. Can agency banking improve financial inclusion in south. Healthcare services focus on optometry, primary healthcare and oral healthcare.
The topic requires discussion due to its ever growing impact on online and offline behaviour of young people. The scope of offered services may include facilities to. It further examines different regulations that have influenced the development of financial inclusion through the use of the mobile financial services in the 4 countries. By bridget king and sascha graham on march 31, 2015 posted in banking mobile payment services are typically the transfer of funds or payments using mobile devices that do not rely on traditional banking or payment services. Supervisory challenges to mitigate security risks 11 overview of the survey the analysis carried out is based on the responses to the survey and complemented by deskbased research. Research conducted by world wide worx, a technology research company. The challenges of implementing electronic payment systems the case of ghanas ezwich payment system. To compete in africas diverse mobile money markets, banks must offer distinctive mobile and digital services not only in payments and deposits, but across the spectrum of financial services. The digital payment service has made various large acquisitions to bolster this intention. May 30, 2012 this chart shows a forecast of mobile payment users, broken down by world region. The culture of non payment threatens municipal financial sustainability, said hattingh. Payment systems in south africa bank for international. Banking in subsaharan africa european investment bank. With a mobile phone growth rate of over 300 percent, africa has skipped the landline development phase of communication altogether.
Thanks to mobile payments, profits have launched into the stratosphere for mobile network operators. South african app snapscan rocks the world of mobile. Africa is the global leader in mobile money, which has become an important component of africas financial services landscape. Mobile payments make that process efficient and effective.
Today, subsaharan africa is home to half of the 277 mobile money services available worldwide. The future of payments in south africa enabling financial inclusion in a converging world. Mobile payment services in south africa south africa is one of the global. Request pdf the legal and regulatory framework of mobile banking and mobile payments in south africa south africa is a developing economy and has both a first and second economy. Africa is poised to be the epicenter of mobile payments. African telecoms giant mtn has canned its mobile money service in south africa, the second mobile company to do so this year. Some mobile payments services in south africa are explored looking into its current state.