South Africa and major emerging African markets are seeing exponential growth in digital payments and its propelling technology is making significant inroads in promoting financial inclusion. The technology backing e-commerce payment gateways is evidently demonstrating its value in helping African markets transition into a fully digital economy.
E-commerce allows businesses to broaden their offerings, increasing their potential for higher profitability. According to BCG, payment revenues in MEA are forecast to grow by 8.3% from 2021, reaching $2.2Tn by 2026. Additionally, electronic payments are forecast to grow from 12% of POS transactions in 2021 to 21% in 2025.
Growing Demand for Digital Payments Infrastructure in Africa
According to a report by EBANX, South Africa, Nigeria and Kenya are leading the digital revolution in Africa, seeing remarkable growing trends and developments. Transitioning to digital payments and developing the infrastructure to maintain, improve and accelerate it has proven to be a significant game-changer. Platforms like M-Pesa in Kenya, the USSD technology in Nigeria, and Payfast in South Africa is gaining widespread popularity.
Network International Secures Investment into South Africa’s Digital Payment Infrastructure
Considering this, alongside the significant adoption of digital payment solutions by business across the continent, Network International, the largest-ever technology IPO from a MEA-based firm globally and the largest technology company to list on LSE since 2015, announced an additional investment of R560m in South African payment technology to help banks, MNOs and Fintech’s create new locally relevant digital payment offerings and experiences. This follows their initial investment of R5 Billion in their acquisition of the DPO group in 2021.
Enhancing Digital Payment Technology in Africa
The investment will be directed towards enhancing payment technology infrastructures in South Africa to meet the growing demand. R60 million will be allocated towards the development of a best of breed payment processing platform by 2024, and R500 million has already been committed to bring Network International’s state of the art payments platform to South Africa.
This will provide banks, MNOs and businesses quick local access to do API integrations into the core platform capabilities and bolt on third party partners across a range of services such as a Card Management System to issue cards, and acquirer processing that enables a broad range of merchant services.
Technology By South Africans, For South Africans
In an official press statement delivered by representatives from Network International, Dr Reda Helal Managing Director and Chief Executive Officer Nandan Mer expressed their enthusiasm and confidence in making the investment and believe South Africa, and the broader African content’s prospects for growth in the digital payment’s landscape, to be promising.
Chief Executive Officer, Nandan Mer made this pertinent statement as he shared his sentiments about the latest venture with those in attendance at the Network One launch: “We are declaring that we are no more a Middle Eastern Africa company doing business in South Africa, but a South African company with offices in other parts of the world. We want to go deep. We want to be embedded in the economy here and fulfill our purpose.”
Both Nandan and Dr. Reda emphasised that their facilities in South Africa are fully operated by local seasoned professionals with over 400 years of expertise in digital payments technology.
“We are from the Middle East and Africa. We’re for the Middle East and Africa. All 2000 employees of ours are based on the continent. Not a single person works outside the continent,” stated Nandan, adding that although they are listed in the UK, all their technology is developed in Africa and that all the company’s technologists are based in the region.
Significant Milestone in the World of Digital Payments
The investment marks a significant milestone for the business of digital payments and further establishes and solidifies a lasting, profitable partnership between the Middle East and Africa that seeks to help both economies and businesses grow. The next big challenge will be to find a solution to assist African markets in transitioning from cash transactions to digital transactions which still make up 50% of payments. This transition will open up a whole new world of opportunity for merchants in the African continent.
Transition Towards a Cashless Society
Already one step ahead of the game, Brendan Williamson, Payfast’s managing director, says the transition may be more seamless than we think, “With more than 70% of the population accessing the internet through their phones, all the infrastructure that we need to go cashless is already there. The next step is connecting everybody to a payments solution that suits them best, online or in-store.”