Africa sees sustained growth in supply of instant payment systems: report

By Xinhua
On 10 November 2023 at 06:57

Africa sees sustained growth in both the supply of instant payment systems and demand for their functionality, according to a UN report.

The United Nations Economic Commission for Africa (UNECA) on Wednesday released the second edition of the annual State of Inclusive Instant Payment System (SIIPS) in Africa. The report said the achievement shows Africa’s strong progress toward the aspirational goal of having comprehensive and inclusive instant payment systems as part of Africa’s Digital Public Infrastructure (DPI), creating a seamless digital ecosystem for people, businesses, and governments.

The first edition of SIIPS report was launched by AfricaNenda in October 2022 to inform public and private sector stakeholders on the developments of instant payment system (IPS) in Africa, including an assessment of the inclusiveness of such systems, with consumer insights and case studies.

This year’s SIIPS edition highlighted developments in the IPS landscape and included a spotlight on cross border retail payments’ policy and regulatory harmonization in Africa.

According to the report, three new instant payments systems that have been launched in Ethiopia, Morocco and South Africa in the last 12 months have brought the total number of live domestic and regional instant payment systems on the continent to 32 even though they were not all inclusive.

"The volume of payments and the total value of payments processed have grown rapidly since 2018, by 47 percent and 39 percent, respectively. IPS in Africa facilitated nearly 32 billion transactions valued at approximately 1.2 trillion U.S. dollars in 2022," the report said.

However, the report indicated that there are still challenges in bringing inclusive instant payment system ecosystem in Africa.

"To date, most of the live IPS are either not ranked, due to lack of publicly available IPS data and information, or have reached only a basic level of inclusiveness, meaning the IPS offers minimal channel functionality and only person-to-person and person-to-business transactions are supported," the report noted.

The report further said 27 countries have yet to set up a domestic instant payment system, although 17 have plans on the way and three regional payment systems are also in progress across the continent.

"The second edition of the SIIPS report underscored significant advancement in digital payments adoption, playing a pivotal milestone for the effective realization of AfCFTA’s objectives," the report said.

The report noted that there is a need to address the exigent requirement for establishment of trusted authentication systems that can work seamlessly across the continent through interoperable digital ID systems.