Driving fintech adoption in Sub-Saharan Africa

March 14, 2023 | By Mark Elliott
Fintech has made great inroads in Africa despite economic challenges. Mastercard has positioned itself at the forefront of this disruption by partnering with end-user fintech companies and fintech enablers to establish a new value chain and deploy innovative technologies enhancing financial services across the continent.

In an effort to boost financial and digital inclusion, many nations are incorporating new payment methods, with Kenya, Nigeria, and South Africa leading the way.

The right products and solutions attract funding and investment, leading to a rapid expansion of the fintech sector. Across Sub-Saharan Africa, fintech startups recorded an 894% year-on-year surge in funding in 2021.

The most successful fintech innovations eliminate pain points and reduce friction, bringing effortless convenience to people’s fingertips. We have identified three main trends encouraging the development of these solutions in the region.

First, there are growing opportunities to scale in an interconnected global marketplace, which is also seeing an increase in borderless transactions.

Second, the development of telecom infrastructure is contributing to rising smartphone penetration, a key driver of fintech adoption.

Finally, policy-level governance efforts will loom large in fintech’s future. It’s critical for regulatory bodies to strike the right balance between enabling financial innovation and mitigating the risks to financial integrity and consumer protection. At Mastercard, we work closely with regulators and policymakers, as well as partners and innovators, to keep this a safe space.

New technologies are boosting the adoption of emerging payment methods. Buy Now Pay Later (BNPL), in particular, is expected to account for nearly a quarter of all global e-commerce transactions by 2026. In the Sub-Saharan region, 89% of consumers used at least one digital payment method in 2021.

Connecting Africa’s rural communities to the global digital infrastructure offers tangible economic and social benefits, and fintech is driving inclusion from the ground up. Pioneering companies that are shaping this landscape are important partners in our mission to bring one billion people and 50 million SMEs into the digital economy by 2025.

From our best-in-class APIs and data assets to our enabling initiatives, such as Mastercard Engage, Fintech Express, and Start Path, we provide crucial support and tools for fintech innovators to achieve scale at pace.

The world thrives when fintech companies have access to the technology they need to democratize finances. Through partnerships, we can close the digital divide, co-create solutions, and innovate for real impact to accelerate the shift to a cashless economy.

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Mark Elliott, Division President, Sub-Saharan Africa