Payment systems in sub-Saharan Africa

Payment systems in sub-Saharan Africa

December 21, 2018    
This two-part note series explores the state of national and regional payment systems in sub-Saharan Africa (SSA).

Note 1 explores themes and imperatives for national and regional payment systems that enable remittances. It provides an overview of the regulatory frameworks in SSA and the principles to be considered to mitigate risks within a payment system. It builds on our barriers to remittances series as well as nine national and regional payment system case studies (presented in Note 2) to identify key themes emerging in payment systems across the region and develop a set of guidelines for national and regional payment system development.


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Key themes explored in the note are:

  • Innovations transforming the status quo in SSA payments. The payments landscape in SSA continues to evolve on the back of innovation, development of alternative payment solutions and the entry of dynamic market players (McKinsey, 2014).
  • Payment systems unable to fully support innovation. Despite these innovations, the necessary infrastructure, regulation and payment ecosystem do not yet exist to ensure the optimal development of payment services and hence remittances in SSA.
  • Payment system hampering development of formal remittance channels. Payment systems that enable remittances are the underlying mechanisms that determine much of the formal remittances service offerings and outcomes.
  • Developing financially inclusive payment systems that enable remittances. The purpose of this study is to investigate the nature and structure of national and regional payment systems across SSA to identify trends, issues and potential solutions.

Note 2 explores that state and regional payment systems market development through four case studies of regional payment systems as well as five case studies of national payment systems in SSA.

For each case study, we broadly consider the following:

  • Payment system infrastructure: A critical element of any payment system is the infrastructure that supports the clearing and/or settlement of payments. Each case study considers the various hardware, software, secure telecommunications network and operating environments used to manage and operate payment systems at the national and regional levels.
  • Regulation: This section considers the prevailing regulatory environment and the ways in which payment system regulation has evolved in the face of recent political and technological developments.
  • Trends: Emerging trends related to payment system use and innovations in the national and regional contexts.
  • Key learnings: Each case study concludes with a brief synthesis of key learnings and insights that have emerged within the payment system of the specific region or country.

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