Mobile Payment Adoption and Trends in African E-commerce

• Africa had 1.2 billion registered mobile money accounts and 347 million active users as reported by CIO Africa.²
• East Africa recorded $806 billion in mobile money transaction value with 193 million active accounts, while West Africa processed $498 billion with over 517 million registered accounts, according to CIO Africa.
• Over half of the African population lacks a traditional bank account, making mobile payment solutions a convenient alternative, according to Nikulipe.
• Mobile payments have become the primary transaction infrastructure in Africa, replacing cash, a trend identified as prominent in emerging markets for 2022 by Nikulipe.

Mobile payments are rapidly becoming the dominant transaction infrastructure across Africa, effectively replacing cash for a significant portion of the population. This shift is underscored by the sheer volume of mobile money accounts and active users. CIO Africa reports that the continent boasts 1.2 billion registered mobile money accounts, with 347 million users actively engaging with these services.² This widespread adoption signifies a fundamental change in how Africans conduct financial transactions, moving away from traditional cash-based systems towards digital, mobile-first solutions.

The preference for familiar, daily payment methods is a key driver behind this transition. Consumers are increasingly opting for mobile money, instant bank transfers, QR payments, and local digital wallets, reflecting a growing comfort and reliance on these platforms. This trend is further amplified by the fact that over half of the African population currently lacks a traditional bank account, as noted by Nikulipe. For these individuals, mobile payment solutions offer unparalleled convenience and accessibility, bridging a critical gap in financial inclusion and enabling participation in the digital economy.

This burgeoning reliance on mobile payments is not merely a consumer preference but a foundational shift that is reshaping the entire financial ecosystem. The trend was identified as a prominent payment trend in emerging markets for 2022 by Nikulipe, indicating its growing significance. As more Africans gain access to mobile services and the internet, the utility and reach of mobile payment systems are set to expand further, solidifying their position as the primary infrastructure for commerce and daily transactions across the continent.

While mobile payments are a continent-wide phenomenon, significant regional disparities exist in their adoption and transaction volumes. CIO Africa highlights that East Africa recorded a substantial $806 billion in mobile money transaction value, supported by 193 million active accounts. This region, with pioneers like Safaricom and its M-Pesa service, has long been at the forefront of mobile money innovation and usage, demonstrating a mature market.

In contrast, West Africa processed $498 billion in mobile money transactions, but with a considerably larger base of over 517 million registered accounts.¹ This suggests a potentially lower average transaction value per user compared to East Africa, or a higher proportion of registered accounts that are less actively used. These figures, both from CIO Africa, illustrate the diverse landscape of mobile money adoption across the continent, influenced by varying economic conditions, regulatory environments, and market maturity.

The structural fragmentation across currencies and jurisdictions across Africa also influences the scalability of digital payments. While regions like East Africa show high transaction values, the overall continent's ability to scale digital payments is increasingly dependent on robust liquidity management, rapid settlement speeds, and efficient execution-layer infrastructure. Initiatives like the Pan-African Payment and Settlement System (PAPSS) and the African Continental Free Trade Area (AfCFTA) are crucial in addressing these challenges and fostering a more integrated payments ecosystem.

A significant driver for the widespread adoption of mobile payments in Africa is the large unbanked population. Nikulipe reports that over half of the African population currently lacks a traditional bank account, making mobile payment solutions not just convenient but essential for financial participation. In 2021, nearly half of adult Africans preferred cash payments, with debit card penetration at only 10% and credit card ownership averaging a mere 2%.⁴ This stark contrast highlights the vacuum that mobile money services have effectively filled.

The preference for mobile money is deeply intertwined with its accessibility and ease of use for those outside the formal banking system. Consumers increasingly prefer payment methods they use daily, and for many, this means mobile money wallets. This reliance on mobile solutions is further supported by increasing mobile internet usage across the continent. As of 2021, Africa's mobile internet usage was 13% higher than the global average, creating a fertile ground for digital payment services to thrive and expand their reach.⁴

The growth in mobile payment adoption is directly linked to initiatives aimed at financial inclusion. Supportive regulations, innovative services, and strategic partnerships are all key drivers that have enabled mobile money markets to flourish. As e-commerce penetration in Africa is expected to reach 40 percent by 2025, the role of mobile payments as the primary enabler of these transactions becomes even more critical, providing a pathway for millions to engage in online commerce.⁴

For e-commerce businesses operating in Africa, selecting the right payment gateway is crucial for facilitating transactions and ensuring a smooth customer experience. A payment gateway acts as the digital equivalent of a physical store's card terminal, capturing, encrypting, and transmitting payment details for approval. Companies like DPO Group operate across multiple African markets, offering tailored payment solutions for businesses in East and Southern Africa, while PayGate in South Africa provides established services including fraud management and secure payment flows.

The African fintech landscape is populated by a range of providers catering to diverse needs. Interswitch, one of the continent's oldest fintech companies, offers extensive payment infrastructure, including processing and switching services. Flutterwave and Cellulant are also prominent players, providing solutions that support a variety of payment methods, including card payments, mobile money, and local digital wallets across numerous African countries. These providers are instrumental in enabling businesses to accept payments from a broad customer base.

Emerging solutions are also addressing specific collection needs. Kora's collection methods, for instance, encompass bank transfers, international cards, and popular local mobile money wallets like MTN Mobile Money and Airtel Money, alongside virtual accounts. Payment links and virtual accounts are also gaining traction in B2B contexts for automated invoice matching. While platforms like Yoco Online offer a mobile-first, easy-to-set-up option, they may have limitations in international payment support, underscoring the need for businesses to carefully assess their specific requirements when choosing a gateway.

While the growth of mobile money in Africa is undeniable, there are notable discrepancies in reported figures for registered accounts, suggesting varying methodologies or definitions across data providers. CIO Africa reports 1.2 billion registered mobile money accounts continent-wide. However, another set of figures indicates that as of 2023, there were over 709 million registered mobile money accounts across Sub-Saharan Africa.⁵ This significant difference highlights the challenge in obtaining a single, universally agreed-upon number for account registration.

Further examination reveals variations even within specific regions. CIO Africa states that West Africa had over 517 million registered accounts. Yet, when comparing this to the broader Sub-Saharan Africa figure of 709 million, it raises questions about the scope and aggregation of these numbers. These discrepancies could stem from different reporting periods, varying definitions of what constitutes a 'registered account,'. Or whether figures include dormant accounts alongside active ones. Without further clarification from the data sources, it is difficult to reconcile these differing accounts.

These variations underscore the dynamic and evolving nature of the mobile money market in Africa. While the exact number of registered accounts may differ, the overarching trend of substantial growth and widespread adoption is consistent across various reports. The focus remains on the increasing number of active users and the growing transaction values, which are reshaping financial inclusion and e-commerce across the continent. Understanding these nuances is key for businesses and policymakers navigating this complex financial landscape.