AFRICA: LEGACY & INNOVATION
Africa’s payments landscape is evolving at dizzying speed. Abdeslam Alaoui Smaili, CEO of multi-national technology company HPS, based in Morocco, discusses how banks can best meet the challenges and opportunities The payments landscape in Africa, in recent years, has been in a state of friction as financial technology has rubbed up against a continent where vast swathes of the population remain unbanked. The expansion of financial services, notably by m-money and e-money providers, has continued apace across a region with huge mobile phone penetration. That said, payment companies have continued to face an uphill battle in countries where physical currency remains king – it accounts for as much as 94 per cent of retail purchases. As Raghav Prasad, divisional president of Mastercard in sub-Saharan Africa said last year: “Our biggest competitor is cash.” Yet change is afoot, with coronavirus proving a catalyst for reforms that otherwise might have taken years to come to fruition. Millions of Africans have experienced the virtues of a cashless society, as African governments turned to digital payments to financially support citizens unable to work during the pandemic. That has, in turn, forced the modernisation of payment infrastructures. Meanwhile, the private sector continues to drive digital adoption. Home-grown technology company HPS, for example,
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ThePaytechMagazine | Issue 8
recently partnered with Bank of Ghana subsidiary Ghana Interbank Payment and Settlement Systems (GhIPSS) to launch the Ghana Universal QR Code (GhQR) – the first national, harmonised payment system of its kind on the continent. Here, Abdeslam Alaoui Smaili, co-founder and CEO of HPS, which works with many of Africa’s major financial institutions, discusses how the payment landscape is adapting to changing needs. THE PAYTECH MAGAZINE: How has the payment ecosystem in Africa changed in recent years? ABDESLAM ALAOUI SMAILI: Africa has been a leader in mobile money, and in the way it has attracted the underbanked population into the financial circle. But, at the same time, it remained an extremely cash-dependent society. What is interesting is that the pandemic has really changed the situation and economies have been jumping noticeably faster into electronic payments. This has been reinforced by advice from the World Health Organisation, encouraging contactless mobile payments. The acceleration towards electronic payments has been really noticeable at a very large scale. TPM: What has been the impact of this shift away from cash? Has this been at the expense of financial inclusion in Africa? AAS: I think people are still left behind. What was achieved last year was done in an emergency, and most probably not in a very structured way; not at the whole continent level. Some countries have been more aggressive than others, or have been more exposed than others. So yes, the background was there, to be able to accelerate and the crisis has effectively
created the acceleration that we have been looking for – but there is a lot more to do. TPM: GhIPSS has been spearheading Ghana’s shift to a cash-lite society; Ghana’s president said Ghana would eliminate paper from most services and transactions this year. Are there particular trends in Ghana compared to the rest of Africa? AAS: Ghana is a pioneer in many aspects of what it does, and today the Ghanaian model is being followed by other countries, both in terms of Ghana’s internal operations and what it offers to local people. But also the way that GhIPSS and the Ghanaian ecosystem has been able to interface with fintechs outside the country, which has allowed fintechs in Europe and fintechs in North America to use the services that GhIPSS is offering in Ghana. To be able to make an instant transfer from an account in the UK, or the US, down to a deep village in Ghana, and all in an instant way? This is really magic. TPM: Fraud is a scourge on the Africa payments landscape, as elsewhere. How does HPS help combat it? AAS: Fraud is one of the risks, and a pain that our customers and the industry www.fintechf.com
