Africa’s fintech story has often been told through the lens of mobile money. From M-Pesa’s groundbreaking launch in Kenya to MTN and Airtel’s cross-border payment networks, the continent has led the world in financial inclusion through mobile channels.
However, the digital payments landscape is now evolving beyond its origins, entering a new phase defined by interoperability, embedded finance, and cross-border integration.
This next frontier is not just about moving money — it’s about building the rails for Africa’s digital economy.
A Market at Scale
Africa’s digital payments market is projected to exceed $40 billion by 2026, fuelled by a young, mobile-first population and rapid e-commerce adoption. According to GSMA, there are now over 500 million active mobile money accounts on the continent, processing more than $830 billion in transactions annually.
While East Africa remains the epicentre of mobile money, West Africa is catching up fast. Nigeria’s instant payments infrastructure processed over $1 trillion in transactions in 2024, while Ghana and Côte d’Ivoire are seeing double-digit growth in mobile wallet usage.
The next wave of growth will be driven by faster payments, lower transaction costs, and cross-platform compatibility.
The Push for Interoperability
Fragmentation has long been a constraint in Africa’s payments ecosystem. Users could easily send money within the same network, but moving funds across providers or borders was slow and expensive.
That is changing:
- National payment switches like Kenya’s PesaLink, Nigeria’s NIBSS Instant Payments, and Ghana’s GhIPSS are enabling real-time transfers across banks and mobile wallets.
- The Pan-African Payment and Settlement System (PAPSS), launched under the AfCFTA framework, is allowing traders to settle transactions in local currencies, reducing reliance on the U.S. dollar.
- Cross-border interoperability pilots are underway in the Southern African Development Community (SADC) and East African Community (EAC).
These developments not only reduce costs for consumers and businesses but also create opportunities for regional e-commerce and SME growth.
Embedded Finance and the Rise of Super Apps
Beyond standalone payment apps, Africa is seeing the rise of embedded finance — where payment, lending, and insurance services are integrated directly into non-financial platforms.
E-commerce leaders like Jumia, ride-hailing companies like Bolt, and delivery platforms are offering in-app wallets and BNPL (Buy Now Pay Later) options. In Nigeria, Flutterwave’s new solutions allow merchants to integrate payments into websites and apps in minutes. In Egypt, Fawry’s platform enables utility bill payments, ticket booking, and microloans from a single interface.
Super apps are creating sticky ecosystems where consumers can shop, pay, borrow, and invest without leaving a single digital environment — a model that has already proven highly profitable in Asia.
The Regulatory Balancing Act
The speed of innovation in digital payments has pushed regulators to adapt quickly. Some countries are leading with forward-looking policies:
- Kenya has introduced a regulatory sandbox for digital lenders and fintech startups.
- South Africa is advancing open banking regulations to standardise data sharing and promote competition.
- Nigeria has launched new instant payment services and is tightening consumer protection for digital transactions.
However, balancing innovation with stability remains a challenge. Overregulation risks stifling startups, while under regulation could undermine trust in the system.
Investment Momentum and Strategic Partnerships
Fintech continues to attract the lion’s share of venture capital in Africa, accounting for more than 40% of all startup funding in 2024. Strategic acquisitions are also reshaping the sector — MFS Africa’s acquisition of U.S.-based Global Technology Partners opened the door for African fintechs to issue virtual cards linked to global networks.
Partnerships with global players are accelerating: Visa and Mastercard are both investing heavily in African fintech startups, Stripe is expanding its reach through Paystack, and PayPal has entered into new remittance integrations with mobile money operators.
This influx of capital and expertise is accelerating innovation but also intensifying competition, pushing local fintechs to scale faster or specialise more deeply.
The transformation of Africa’s payment systems is more than a fintech success story — it is a foundation for broader economic growth. Interoperable, low-cost, and accessible payment rails are essential for e-commerce expansion, SME competitiveness, and financial inclusion.
The next few years will determine whether Africa’s digital payments boom becomes a sustainable growth engine or a fragmented patchwork. For investors, policymakers, and innovators alike, the prize is clear: a fully connected African payments network that can power the continent’s digital economy for decades to come.
Source: Further Africa
