Payments digitisation powers ahead

The trend towards digitisation in the payments world was supercharged in the past year as the pandemic saw customers reach for digital solutions in far greater numbers than ever before. For financial institutions in Africa, it is vital to stay on top of this demand.

The global payment business landscape has undergone unprecedented change in the past year. A move to digitisation that was already underway was rapidly accelerated by the onset of the Covid-19 pandemic in 2020. Digital innovation today is totally reshaping the way that financial institutions are providing services and doing business. The pandemic has also reinforced the importance of digital payments for ensuring safe and convenient payments, both on a domestic level and globally. 

The pandemic effect

Speaking at the recent SWIFT event 'Towards instant, frictionless payments: Focus on Africa', Ismaël Ahmed M. Saker, Deputy Director Payment Systems at the Bank of Central African States (BEAC) said that the pandemic has had a great impact on the industry and it has set the impetus for regulators to progress with digital transformation. For example, to encourage the adoption of digital payments the BEAC has worked with market participants to reduce the fees associated with such payments. 

"The pandemic has accelerated digital payments - including contactless payments," commented Sadiya Hossen, Head of Strategic Projects at MCB Limited. "The value of digital payments - including mobile payments - in the region has increased by as much as 500%.”

Keeping up to speed with a changing payments landscape

"The key word for the payments business in Africa is change," commented Louise Mostert, Senior Country Manager, South Africa at SWIFT. One of the main drivers for this change has been the growing expectation of customers for a seamless payments experience. This has been propelled by increased access to mobile phones and e-commerce. 

"The functionality and features of retail payments - the need for cheap, immediate and transparent payments - is now being demanded by companies, along with a demand for richer data," noted Bernard Carless, SWIFT Board Member and Head of Settlement at FirstRand Group Treasury. "Corporates have a need for services and solutions rather than just products, such as real-time checking and mutualised services."

With the rapid pace of change highlighting what is possible in payments, continuing areas of friction, particularly in cross-border payments, are a real cause for concern. From multi-currency challenges, to regulatory issues and sanctions screening, through to a lack of interoperability with domestic systems and rich data, the challenge of removing friction from cross-border payments is substantial. However, as Mostert pointed out, SWIFT has announced an ambitious strategy to address these challenges and to make sure that the community can go forward with frictionless payments.