Mastercard has released a report on growth in the African fintech sector
Mastercard, a leading global payments fintech company, recently released a study report on the “Future of Fintech in Africa” in its October 2022 issue. The study report added about the early movement Africa became a financing powerhouse in the region.
Mastercard study report
According to Mastercard’s report, Africa has had an early position in the use of fintech to influence financial inclusion and economic transformation.
The diversity of sectors fintech caters to is represented in the firms that have now become part of Mastercard’s suite of partners and customers, from cryptocurrency and open banking to data intelligence and identity solutions.
Matercard is committed to helping to stimulate fintech acceleration by offering access to its expertise, network and technology. The fintech firm leverages Matercard’s strengths to be a portfolio of technology solutions, APIs, developer tools, partner networks and startup programs.
Matercard’s three key findings
The Mastercard report highlighted the three key findings: Ecosystem, funding and regulation.
Ecosystem first includes the information on Africa’s domestic e-payments market, as the market is estimated to see 20% revenue growth per year (compared to 7% globally.) This could reach around US$40 billion by 2025.
The countries leading the transition to digital payments are Kenya, Nigeria and South Africa. It must be noted that more than 90% of jurisdictions in Africa established regulatory frameworks for digital payments.
And when the pandemic hit the world, 72% of African jurisdictions implemented the measures with respect to digital payments and international money transfers. And in South Africa, 85% of citizens said they will continue to use digital cross-border payments after the pandemic.
Financing that the continent collectively in sub-Saharan fintech startups recorded 894% of year-on-year growth in 2021. It is the second highest in the Middle East, Africa and Pakistan region.
However, Nigeria became a leading fintech hub in the Middle East, Africa and Pakistan.
Fintech startup growth in Africa grew from 311 in 2019 to 564 in 2021. South Africa, Nigeria and Kenya became “Master Hubs”.
It can be seen that the fintech sector accounted for 27% of the number of closed deals as 61% of the USD 2.7 billion in venture capital rolled out across Africa in 2021.
Regulation from regulators across countries added a collaborative approach that enabled the introduction of new solutions by fintech firms.
The African market, which does not seem uniform in terms of regulation, poses the challenges in scaling. As the pan-African payment and settlement system proves transformative for cross-border payments.
In addition, a survey shows that 53% of markets in the SSA region indicate that they “urgently need” more regulatory support for eKYC processes. On the other hand, 65% of jurisdictions in Africa added that they had no plans to implement an open banking framework, compared to 30% of regulators in APAC and 23% in MENA.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional money exchange systems. She is also fascinated by the blockchain technology and its function.
