11 Nov Can Banks Really Compete with Mobile Money When it Comes to Online Payment Across Sub-Saharan Africa?

Great article by The Africa Report showing us how the online payments and banking landscape is changing across Sub-Saharan Africa.  Africa is already one step ahead of the game with mobile money which is simpler, cheaper and easier to engage with than the banking systems of the rest of the world.

The banks have had a hard time competing with mobile money which sneaked in under the radar to become the dominant way to pay and bring African citizens onto the financial rails of economic inclusion.  Effectively any African consumer can buy goods and services if they have access to the internet using their mobile phone and mobile money.  

And these poor banks now have it even harder with the latest loosening up of legislation around MNO’s which allows them to compete and provide bank-like services to their consumers.  MNOs have such an advantage in that these telecoms companies have their consumers at the end of the phone line, they can communicate cost effectively with them, they know their habits, they can bundle their services, they can subsidise their connectivity to encourage participation in profitable value added services.

Ghana, with its online payment methods MTN Mobile Money, AirtelTigo and Vodafone Cash held by almost 50% of the population, is “the fastest-growing mobile-money market in Africa”.  Certain MNO’s dominate the market. In Kenya, Safaricom has more than a 60% market share and their M-Pesa has 80% of the mobile money market share. In Ghana, MTN Mobile Money has 90% transactional market share.  It’s hard for banks or any new entrants for that matter to compete.  

As compared with MNO’s who take the banking to the people. banks are just not that good at doing business on the ground with lowering marginal costs per new entrant.  Governments (and the rest of the world) have realised that financial inclusion is not only a mandatory socio-economic requirement, but is good for business and economic growth of the country. 

So enter legislation that favours independent growth of provision of bank-type mobile money services without the need for a bank and the outcome is unprecedented growth of financial connectedness and mobility fuelling these already accelerating emerging markets.  This is great for eCommerce businesses targeting these regions and looking for an Africa payment provider to facilitate online payment with mobile money.  

MTN Mobile Money for example has set a goal of having 20m mobile money customers in Ghana by 2021.  This kind of growth is great for payment providers like us and for our multinational eCommerce merchants looking to get paid in countries like Ghana, Nigeria, South Africa and Kenya.  Its a matter of getting established and then enjoying the benefits of organic growth.

Please contact us if you are looking for online payment and eCommerce payments in Ghana, Kenya, Nigeria and South Africa. 


Thank you for the inspiration to https://www.theafricareport.com/17201/ghanas-banks-may-find-themselves-undercut-by-mtns-mobile-money/