While the use of mobile money has grown into a phenomenon globally, users in Africa remain a significant driver. According to a report from GSMA, Africa accounts for 70% of the total US$1 trillion mobile money value around the world. The adoption of mobile money or digital wallet has constantly been growing over the last two years – amid the global pandemic outbreak – in Africa.
The report from GSMA revealed that the value of mobile money transactions in Africa surged by 39% to reach US$701.4 billion in 2021 from US$495 billion in 2020. On the other hand, the volume of mobile money transactions increased 23% to reach 36.7 billion in 2021, up from 27.5 billion in 2020. This trend is expected to continue further in 2022, as the popularity of digital wallets continues to rise among consumers across Africa.
With the African digital payments ecosystem recording strong growth, the continent has attracted interest from foreign players that are looking to leverage the high growth potential of the market in Africa by launching their services. For instance,
Notably, the high penetration of smartphone devices has aided the rise of digital wallet adoption in Africa, and Google is banking on this trend in South Africa, where it is competing with Apple Pay, which launched the mobile wallet in the country in 2021. Android accounted for 77-80% of the smartphone devices in Africa in H1 2022, compared to just 12-16% for Apple smartphones.
The high Android mobile penetration rate in Africa gives Google Wallet a competitive edge over Apple Pay. Moreover, with Google positioning its mobile wallet as an all-in-one tool for users, PayNXT360 expects the digital wallet to gain more popularity compared to other wallets in the region. From the short to medium-term perspective, PayNXT360 also expects Google to add more features to its digital wallet offering as the firm moves ahead with its plans to replace physical wallets.
With the strong shift towards digital payments across the African continent, PayNXT360 expects Google to further launch its mobile wallet in more countries in the region over the next three to four years. Additionally, as the African market continues to record strong growth in the digital payments space, more and more foreign players are expected to expand their services in Africa from the short to medium-term perspective.
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