By Quintin van der Linde, Senior New Business Developer at Ecentric Payment Systems
Africa is projected to have more than half a billion e-commerce users by 2025. In part, this can be attributed to the growing adoption of alternative payment methods in the wake of the pandemic. With 45% of the population in Sub-Saharan Africa not having a bank account, the availability of more user-friendly technologies has provided a significant boost to economic activities.
Contributing to the changing e-commerce marketplace is the increased internet penetration rate in Africa. Given how more people now have access to affordable and reliable internet connectivity, they have started using e-commerce to fulfil many of their shopping needs. The ubiquity of mobile technology has also helped greatly. Often, people have several mobile SIM cards to benefit from the various voice and data specials from the different service providers.
Furthermore, the continent’s urbanisation and population growth have also played a significant role in fuelling this growth, with more people migrating to urban areas where e-commerce infrastructure is more readily available. Another significant advantage has been how the governments of many countries have supported and driven policy reforms to simplify the market entry for multinationals to strengthen the economic potential of e-commerce in Africa.
Going beyond traditional approaches
Mobile payments and digital wallets have transformed traditional transactions for both businesses and consumers, offering unparalleled convenience. While many people still lack access to traditional banking services, mobile payments and digital wallets have delivered an essential lifeline. Trust and security, once barriers to e-commerce adoption, have been addressed through robust security measures implemented by payment service providers and the growing trust consumers have in their devices and e-commerce platforms.
Alternative payment methods, such as SnapScan and wallets – often provided by MNOs and triggered by QR codes – have expedited financial inclusion in Africa. Mobile bank transfers and instant EFTs have gained popularity, providing accessible and efficient options for individuals to conduct transactions.
Another example can be found in the PayShap programme. This rapid payment initiative allows for instant peer-to-peer transactions. And while not new, digital wallets have seen increased adoption due to their user-friendly nature, low cost and accessibility. So, even though card payments and cash are preferred by many, the rise of digital wallets and other alternative payment methods signals a change in the payment ecosystem of the continent.
Activating seamless e-commerce
This does not mean that merchants and consumers do not have challenges when it comes to adopting digital wallet payments and alternative payment methods. Fortunately, the traditional barriers of limited infrastructure and low digital literacy that limited widespread adoption previously, have largely been addressed.
Moreover, interoperability among various digital wallets and payment systems is improving, allowing retailers to accept a variety of payment methods seamlessly. To help create a more enabling environment, Ecentric has developed OmniHub, a solution that bridges the gap between in-store and online transactions. Through dynamic QR codes, the payment process is simplified across both online and in-store channels, to ensure consumers benefit from a delightfully slick payment experience.
Ultimately, the success of alternative payment methods in Africa’s e-commerce ecosystem depends on the merchants’ understanding of their customers’ preferences and needs. Consumers crave variety and a seamless payment experience tailored to their specific preferences. Ecentric strives to optimise this transaction flow, enabling merchants to offer a wide array of payment options, including cards, cash, mobile wallets, and loyalty schemes. Much of this is determined by the kind of products and services provided by the merchant. For instance, an e-hailing service must provide a seamless payment experience without the customer even thinking about it. On the flip side, a retail store should have a variety of payment options to cater for different digital wallets and consumer preference.
By adopting a partnership approach to working with payment service providers and acquirers, Ecentric ensures that merchants get the flexibility in adopting virtually any payment solution to thrive in the African e-commerce landscape. This strategy comes down to enabling everybody to tap into the potential of e-commerce on the continent with consumers benefitting from a frictionless payment experience.
With near 100% uptime and a commitment to security and authentication, Ecentric is well-positioned to unlock the e-commerce potential in Africa and contribute to the continent’s economic growth, benefitting both businesses and consumers alike.