Enhanced cross-border payments next stage of African fintech evolution – AZA Finance

AZA Finance Country Manager, Nana Yaw Owusu Banahene, has highlighted the development of cross-border payments and other underutilized financial services as the next big step for financial technology (fintech) in Africa.

Speaking ahead of The Money Summit (TMS) 2023, which comes off on May 9 under the theme ‘Africa’s Robust Financial Sector: The Catalyst For Sustainable Economic Growth’, Mr. Banahene noted that while there are already initiatives such as the Pan-African Payment and Settlement System (PAPSS) which has an Application Programming Interface (API) that several stakeholders can access for cross-border payments, it is essential to consider other businesses’ presence in the space.

“For Africa, I think to crack the code means cross-border payments on the continent. I know there’s PAPSS, which has created an API that people can connect to. But what we have to also take into consideration and what has made several business models survive is not cutting out other people’s businesses from the space totally,” he said.

In January 2022, PAPSS was officially unveilled as a conduit for inter-country payments in Africa with the aim of bolstering the African Continental Free Trade Area (AfCFTA) – the world’s most expansive economic and trading bloc.

The platform seeks to streamline the disparate financial systems and over 40 currencies utilized across the continent – potentially saving Africa a staggering US$5billion in annual transaction costs.

While the focus has been on the platform’s partnership with banks, AZA’s Finance Country Manager believes the tailored-solutions provided by fintechs will prove indispensable – stressing the need for fintechs to enable cross-border payments for retail trade, which could significantly drive growth in the industry.

He further stated that new products and services, rather than technology, will ultimately drive fintech growth.

Untapped areas

Mr. Banahene believes that while introducing the mobile money revolution and subsequently the direct digital termination of remittances into wallets and bank accounts were game-changers that brought millions of people – especially in sub-Saharan Africa – into the financial system, they are approaching a plateau.

Consequently, he said, fintechs must focus on other financial services that have not been fully utilised, such as savings and insurance, as there is great potential in these markets beyond new technologies.

“The revolution of fintechs on the continent started properly with mobile money. Since mobile money came in, people have been able to access more financial services – savings, withdrawals and transfers. That in itself enabled millions of people, especially in sub-Saharan Africa, to come on board,” he noted.

“In the last few years we have also seen growth in direct, digital termination of remittances into wallets and bank accounts. Remittances have undoubtedly been the main source of revenue for many in Africa, even for some who do not work. We see migrants sending money back to their families, and sums such as US$50 and US$20 are able to solve many problems.

“Previously, people had to travel miles to go and make these withdrawals from banks or rely on other people to do it, and this was not always reliable. But with the development of direct termination into wallets, even those in the remotest hinterlands – and we can use Ghana as an example – are able to receive their funds with minimal hassle and have access to healthcare, school fees and other pressing needs,” Mr. Banahene explained.

This comes as recent data from the GSM Association (GSMA) show that in 2022 the West African region – led by Ghana – has surpassed market pioneers East Africa and rest of the world in terms of its share of registered mobile money accounts; with its global share increasing from 11 percent in 2021 to 33 percent at end of the year.

The 290 million registered accounts in the region accounted for US$277billion in transactions. This development was attributed, in part, to regulatory initiatives; and Mr. Banahene believes Ghana’s performance is a reflection of the proactive posture taken by the Bank of Ghana and related entities.

At the same time, remittances to sub-Saharan Africa remained strong; growing by 5.2 percent to US$53billion in 2022 and defying the effects of global headwinds.

Hand in hand

The fintech leader acknowledged that there was initially tension and concerns around regulation between banks and fintechs; but as fintechs were able to challenge the system and implement new services, banks began reaching out to them directly for foreign exchange trades and other things, and to be part of the ecosystem.

He noted that banks on the continent have traditionally thrived on deposits and loans, limiting their capacity to collaborate; but fintechs have created an opportunity for all players within the value chain to benefit.

“Generally, banks on the continent thrived on deposits and loans, and this limited their capacity to collaborate; but fintechs have created that opportunity whereby within the value chain everybody can eat a piece of the pie. Now, banks are seeing that they can partner with specific fintechs which provide specific solutions and it’s a win-win for everyone,” he added.

TMS 2023

The third edition of TMS will bring together experts from across the financial industry to discuss the latest trends and opportunities in Africa’s rapidly-evolving financial landscape. During the first plenary session, the AZA Finance Country Manager will join other industry experts in sharing innovative ideas and predictions that will drive economic growth and shape the future of Fintech in Africa.

The session will explore how traditional financial institutions and tech-savvy start-ups can collaborate to promote financial inclusiveness and create a robust financial sector, as the global Fintech market is expected to reach US$332.5billion by 2028.

The panellists in this session include Archie Hesse, CEO-GhIPSS; Eric Coffie, Chief Digital & Marketing Officer-GCB Bank; and Allen Quaye, Head of Retail Banking-FBN Bank Ghana. Richard Nunekpeku, Vice president-Ghana Fintech and Payment Association, will moderate the discussion. The session’s topic is ‘From Competition to Collaboration: How Fintech is Shaping the Future of Finance’.

In the second plenary session, panellists including Edward Forkuo Kyei, Group CEO-Glico Group; Kwabena Boamah, Managing Director-Stanbic Investment Management Systems (SIMS); Dzifa Fiati, Head-Group Business at Star Life Assurance; and Nana Wiafe Boamah, Chief Investment Officer-Axis Pensions Trust, will discuss the significance of a robust securities industry to Ghana’s economy, and the roles of insurance, pensions, fund managers and other market players.


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AZA Finance Country Manager, Nana Yaw Owusu Banahene, has highlighted the development of cross-border payments and other underutilized financial services as the next big step for financial technology (fintech) in Africa.