On the horizon: Africa’s payments future

payments market in Africa

Gambling Insider discusses

As What The Next Steps Are For Payments Solutions On The Continent

When thinking about the African continent, many images are conjured. From the vast terrain of the Serengeti, where a myriad of animals exist – and hundreds of dentists from America flock to picture from the back of a Jeep – to the expansive Sahara desert, where the yawning sea of sand takes a person into Frank Herbert’s celebrated sci-fi novel Dune and the planet of Arrakis. However, aside from the clichéd images of Africa, it is a continent that is quickly becoming the next big market for gambling payments companies.

The more and more African countries regulate and open up to gambling, the more of a rush there is to quickly gain a foothold and significant market presence there. Payments systems and software business has followed the early crowd to Africa, where a select few companies are now getting in ahead of the rush where each can, now that Africa has begun to embrace the industry. However, the biggest driver and thereby need for fast payments software in African nations right now isn’t the spread of sports betting or iGaming, it is the reach of the World Wide Web. Many nations in Africa only possess limited access to internet connectivity, so as those places are able to access it further, the more payments solutions become a necessity – in gambling and various other industries. Delving deeper into payments in the African market, Gambling Insider speaks to payments supplier MiFinity about the big questions that face the continent’s payments solutions; and what the future holds for the gambling markets there.

Paul Kavanagh – MiFinity

Speaking to Gambling Insider , Paul Kavanagh, Co-Founder and CEO of MiFinity, discusses the key themes surrounding African payments.

How does the payments market differ in Africa from other continents, such as LatAm or Europe?

“Many parts of Africa still have a large unbanked population, so traditional banking solutions have yet to be available to many. However, Africa’s payments mix is evolving rapidly, with banks and non-bank players innovating to reduce friction in domestic and cross-border payments. Africa has a unique mobile money landscape, with a large majority of the population accessing financial services through mobile devices. Mobile money platforms like M-Pesa in Kenya have gained widespread adoption and have revolutionised the payments market in Africa. This level of mobile money penetration is not as prevalent as in other continents.

“It also has a significant informal economy, where many transactions occur outside of any formal banking system. As a result, alternative payment methods such as cash-based transactions and informal networks play a significant role. Another factor that sets it apart from other continents is Africa’s large diaspora population. Remittances from abroad play a crucial role in the continent’s economy, so specialised services and platforms have been developed to cater for this specific need.

“Against this backdrop, in recent years, the region has seen some of the fastest growth in digital payments; eWallets see the highest adoption, as they address many of the requirements of this unique market.”

Is internet reach a significant factor in the mobile payments need across many African markets?

“Absolutely. In 2022, the value of mobile money transactions in Africa reached $836bn, up 22% from 2021. Access to the internet is a key enabler, not just for mobile payments but also for engaging in broader socioeconomic factors. The combination of internet reach and growing mobile penetration rates in many African countries is paving the way for digital payments like eWallets. In total, 83% of the population in Africa is covered by a mobile broadband network, with 61% owning a mobile phone. While there is a usage gap between those with access to the internet and those that use it, the mobile penetration rate in Sub-Saharan Africa has risen significantly in the last decade; and growth is expected to continue well into 2025 and beyond.

“The advent of eWallets has made it possible for people who were previously excluded from the financial system to participate. If you have a mobile phone and internet access, you can create an eWallet account and use digital payment solutions. Internet reach has also created the right environment for some African countries to implement government-led initiatives to drive digital payments adoption and financial inclusion. For example, in countries like Nigeria, government policies have promoted electronic payment systems and reduced reliance on cash transactions.” between Africa and Latin America. For this reason, it’s essential to partner with payment service providers with in-market expertise to ensure a deep understanding of each region’s specific nuances and requirements.”

Is Africa the new LatAm?

“There are certainly parallels. Africa and Latin America have fast-growing populations and increasing access to mobile internet. Africa and LatAm are also the world’s fastest-growth regions for digital buyers.

A complex savannah

“However, there are differences. For example, LatAm’s smartphone penetration initially helped drive online shopping and digital payments followed later. Whereas in Africa, mobile usage has been the foundation for payments and financial inclusion, with purchasing digital services an evolution of this. Both regions are seeing significant eWallet growth and adoption, with Africa experiencing the fastest growth in eWallets compared to Latin America, indicating strong potential for the eCommerce and iGaming markets.

“Despite the similarities between these two continents, it’s important to note that Africa and Latin America have unique characteristics. While both regions have seen advancements in mobile technology and digital payments, the specific dynamics of their payment markets can vary significantly. Factors such as regulatory frameworks, consumer behaviour, and infrastructure development can shape the differences

The African market is a complex savannah of different countries, all of which see gambling differently – with vastly opposing opinions in some places – from near-total bans in the likes of Eritrea, to a rapidly expanding presence in others like South Africa. Gambling’s expansion is dependent on how quickly payments systems can implement software platforms across the continent. But, as MiFinity highlighted, there are vast similarities between the LatAm market a few years ago and the African market now. As digital purchasing increases among increasing populations, the need for payments solutions is rising very quickly.

Though there are also glaring differences – particularly with the usage of smartphones within the population – it seems that a few years from now, the African market could be the next big investment for gambling companies around the globe. Right now, significant swathes of the African continent are still in the process of implementing the infrastructure to support stable internet connections, which is the foundation for the expansion of payments companies. However, it is when those members of the African population gain further access to smartphones that the rest will seemingly fall into place, as the continent looks to become the world’s next big online betting market – with payments an intricate and essential piece of that puzzle.