30 Aug The African eCommerce, and eCommerce Payments Market - The Next Five Years

The race for market share across the African continent in terms of e-commerce is on.  More than a billion consumers with rising incomes, increased connectivity, higher levels of smartphone penetration, increased levels of literacy, and demand for international brand products is resulting in double-digit year-on-year growth in e-commerce revenues and online payment development.

To analyse this market let's start with the eCommerce scale and trends. The first movers are online sales of digital goods because delivery of physical goods can be quite challenging. Superplatforms like Jumia in Nigeria, Kilimall in Kenya and Takealot in South Africa are paving the way for international brands and international e-commerce companies to enter the market.

In terms of country economics the large economies of Nigeria, South Africa and Kenya are a good place to start as hubs for e-commerce entrance into the African market . These three economies are relatively well-developed in terms of infrastructure required for eCommerce, and eCommerce payments are relatively mature. These drivers of eCommerce in the three key territories are further enhanced by the sizes of their populations.

Traditional online payment systems include Nigeria (mainly cards and bank transfer), in South Africa (mainly cards and automated EFT), and in Kenya (M-Pesa is the dominant method of payment for eCommerce). Digital payment systems like Abra and coins like bitcoin,  Monero and Dash, whilst in the speculation phase have not yet made any traction in terms of online payment for eCommerce. Companies like Cardano and Ripple are working with payment providers and governments looking at possibilities of Central Bank Digital Currencies and cross-border remittance. 

There are some significant technological developments and trends taking place and time will tell regardings their adoption over the next five years.  Some of these are the implementation of blockchain, smartcontracts, centralisation and more widespread use of QR codes and wallets. It will be interesting to see how these developments are adopted in terms of the online payments and e-commerce payments landscape across the African continent.

 For now traditional payments by card, bank transfer, mobile money and cash are the dominant ways to pay and get paid for online payments and eCommerce across Africa.

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