OpenWay, a global vendor of digital payment software, partnered with technology analyst house Ovum (now Omdia) to conduct the 2020 Digital Payments in Africa survey. Key retail banks and merchants in East, West and Southern Africa took part to provide a glimpse into the retail payment landscape of Sub-Saharan African region. 

Some interesting attitudes were revealed in the survey. For example, most banks and merchants saw the greatest opportunity in retail payments to be in supporting digital commerce with digital wallets. This trend has great implications, since in Africa as a whole the most profitable payments products are still card-based. The survey revealed where bank perceptions and merchant expectations are mismatched, especially on security and fraud concerns. 39 percent of merchants cited security and fraud prevention as the most in-demand merchant acquiring service, whereas only 25 percent of banks believed that it was. The report concludes with several valuable recommendations for banks and merchants seeking to invest in payment technology and modernize their offerings.

Results came in from 106 banks and 57 merchants in Ethiopia, Ghana, Kenya, Nigeria, Rwanda, South Africa and Tanzania. Participants were questioned on what payment products generated the most revenue, where they see the biggest opportunities in retail payments, their main priorities in improving their infrastructure, and where they will be spending the most. 

The survey results are available for download here.

“The idea was that this research would help banks in the region prioritize areas in their payment infrastructure which need immediate investment. OpenWay has been providing banks and fintechs with digital payment software to for more than a decade, and some of our key clients are in Africa. We are impressed with how the market has changed recently and we know firsthand that many great ideas are being born, which often just need the right technology to turn into a stable product. And we are ready to support financial institutions in their journey towards a digital, more efficient payments future with card projects, digital wallets, instant payments and QR, whether they are individual banks or participants in national and cross-country projects,” comments Maria Vinogradova, Director of Strategy and Market Intelligence at OpenWay.

“Retail payments is a key area for investment for African banks and merchants alike,” adds Daniel Mayo, Director, Data Tools & Insights at Omdia. “69% of banks and 75% of merchants predict spending on payments infrastructure will increase over the next two years; with 25% of banks and 28% of merchants anticipating significant increases in spending of 6% or more. In an environment where most organizations are seeking to reduce their cost bases, this highlights the growing strategic importance of retail payments.”