Workpay icon
Back to Blogs
Global Payment and Compliance

The Rise of Digital Payments in Africa: Transforming the Financial Landscape


Global Payment and Compliance

The Rise of Digital Payments in Africa: Transforming the Financial Landscape

Embrace the transformative power of digital payments in Africa for growth, efficiency, and new opportunities. Integrate solutions, reach new customers, reduce costs, and gain valuable insights. Partner, invest in literacy, address security to stay ahead in the evolving market.

June 8, 2023
min read
June 8, 2023
8 min read
In need of a
HR and Payroll Software?
Sign up for free
In need of a HR and Payroll software?

Sign up for FREE✨!!

One of the critical lessons many businesses took from the COVID-19 pandemic was a need for more efficient mediums of exchange. Innovation is accelerating, with the 21st century witnessing significant changes in how people pay for goods and services, employees, and labourers.

Africa accounts for over 70% of the world's mobile money value, highlighting Africa's future in digital payments. Cash supremacy will likely be challenged in the coming years as digital payments are projected to reach $146.40bn in 2023. 

The article below presents insights into the rise of digital payment in Africa, highlighting key drivers, impacts, challenges, and opportunities.  

Importance Of Digital Payments In Driving Financial Inclusion And Economic Growth

Integrating digital payments into the economies of African nations can address issues of broad economic growth and individual financial empowerment. Here is why digital payments are so important:

Efficiency and Cost Savings

Cash is prone to fraud, has associated costs, and can be time-consuming. Digital transactions significantly reduce reliance on cash, thus reducing operational expenses for businesses, individuals and financial institutions. Digitizing transactions makes financial services cost-effective, transparent, and more efficient. 

Empowering the Unbanked and Informal Sector

African populations are engaged in the formal sector, which faces a challenge in accessing standard financial services. Digital payments ensure that small business owners and others in the informal sector can participate in the formal economy. It reduces poverty and triggers economic growth. 

Financial Inclusion for Rural Communities

Digital payments can bridge the gap between urban and rural areas. They provide services to previously underserved communities. Mobile money platforms allow individuals to access financial services, improving microfinance, agriculture, and other rural sectors.

Access to Financial Services

Unbanked or underbanked individuals can access formal financial services through digital payments. Traditional banking can be challenging and impractical for many African communities, especially in rural places. Mobile money, for example, offers convenience, affordability, and secure transactions. 

Data-Driven Insights and Financial Services

Digital payment solutions generate much transactional data that financial institutions, businesses, and other bodies can use to gain insight into economic patterns, consumer behaviour, and market trends. Data-driven insight develops targeted financial products and services that cater to specific needs. 

Key Drivers of Digital Payments Adoption in Africa

Mobile penetration and smartphone usage

Research shows that mobile phone subscribers in sub-Saharan Africa were 46%, while that smartphone adoption was 65%. The numbers are predicted to grow by 50% or more by 2025. The growth created a favourable environment for digital payments, even in remote or rural areas. 

Expansion of mobile network infrastructure

During the COVID-19 pandemic, the telecom sector saw huge revenues in Africa due to increased demand. Telecommunication companies invested in network coverage, making it easier to access digital payments. 

Increasing availability of affordable smartphones

Most people in Africa access digital payments through mobile money solutions. The lower prices of smartphones in Africa have contributed significantly to the adoption of digital payments. More people can access the apps and solutions that ensure secure payments. 

Transformational Impact of Digital Payments

Enhancing financial inclusion and access to banking services

Digital payments allow individuals who cannot access traditional banking services to participate in formal financial systems. People can send, receive, and manage their money securely, contributing to reduced poverty, economic stability, and empowerment in building finances. 

Empowering small businesses and the informal sector

Digital payments have empowered small businesses and those in the informal sector by providing a convenient and affordable way of accepting and making payments. It helps the firm broaden its customer reach, access financial services such as loans, and keep a record of transactions for monitoring, thus improving the business. 

Improving efficiency and transparency in financial transactions

Digital payments provide enhanced and transparent financial transactions compared to traditional cash-based systems. Transparency and traceable history minimize the risk of fraud and corruption. It encourages honest practices, promotes trust between customers and businesses, and reduces the cost of cash handling. 

Facilitating cross-border transactions and remittances

Traditional ways of sending money across borders can be time-consuming, expensive, and subject to various intermediaries. Digital payments simplify cross-border transactions, making them faster, cheaper, and more accessible. It enables businesses to interact in global trade and promotes economic integration. 

Challenges and Opportunities

Despite the progress African countries have made in transforming the financial landscape with digital payments, it has shortcomings. African countries must, however, recognize the opportunities to do better. 

Infrastructure gaps and connectivity issues

 Access to reliable internet connectivity and electricity can be limited, especially in rural and remote areas. It is primarily due to insufficient infrastructure, which hinders coverage expansion. It is a challenge for African governments to invest in improving infrastructure, reliable power supply, and thus better network coverage.

Building trust and addressing security concerns

There is a concern for the security of digital payments. After all, there are widespread stories of digital transaction hacking and insecurity. Building trust and addressing these security concerns is a necessary step for the successful adoption of digital payments. Providers must provide reassurance by making robust security measures, authentication protocols, and fraud detection systems. 

Promoting digital literacy and financial education

Many people, especially older people in rural communities, need more familiarity with digital technologies. The lack of awareness greatly hinders the full adoption of digital payments. Governments should seize the opportunity to educate individuals on the functionality, benefits, and responsible use of digital payment solutions through training programs, public awareness campaigns, and community initiatives. 

Leveraging partnerships and collaboration

Collaboration between governments, financial institutions, telecommunications providers, and other relevant actors can foster innovation, leverage resources, and create compatible ecosystems. The right partnerships enhance the development of digital payment solutions, expand network reach, and address policy barriers. Working collectively helps to tackle challenges, thus fostering an environment where digital payments are better adapted. 


The use of digital payment methods in Africa is bringing about a revolution that has far-reaching implications for individuals, enterprises, and governments.

To promote both financial inclusion and economic growth simultaneously, there needs to be a focus on the importance of digital payments. Digital payments empower those in the unbanked or informal sectors and promote efficiency, resulting in significant cost savings while bridging gaps within various communities.

That being said, challenges lie ahead, particularly around the deficiencies in infrastructure, worries regarding internet coverage, and insecurities about transactions; an opportunity like this should be noticed for improvement.

With the growing adoption of digital payments within Africa comes a need for continuous learning and keeping pace with evolving technologies. Take advantage of important information - follow Workpay's informative blogs to gain valuable insights about this topic.

Workpay Africa
Linkedin icon

Workpay is a HR and Payroll software company that offers time & attendance, payroll, human resource, leave, expenses and remote teams solutions to businesses across Africa.

In need of a
HR and Payroll Software?
Sign up for free
In need of a HR and Payroll software?

Sign up for FREE✨!!
In need of a HR and Payroll Software?

Request a Demo for Free

Leave a comment below

Thank you! Your comment has been received!
Oops! Something went wrong while submitting the form.
Workpay Newsletter image
Great Insights, Delivered Weekly

Subscribe to get the latest articles, information, and advice to help you better run your small business. Delivered weekly, for free.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.