From the Continent, For the Continent: Building Homegrown Instant Payment Systems to Drive Financial Inclusion in Africa
Africa stands at the cusp of a digital revolution, where innovative payment solutions could unlock economic potential for millions. Yet, with over 400 million adults still excluded from formal financial services, the continent must prioritize homegrown instant payment systems to foster true inclusion and self-reliance.
Africa’s Digital Transformation: A Foundation for Inclusive Growth
Africa’s financial landscape is evolving rapidly, fueled by widespread mobile adoption—even in remote areas—and booming fintech innovation. Digital public infrastructure, including interoperable payment systems and digital IDs, is paving the way for broader economic participation. However, despite these advances, a staggering 400 million Africans remain unbanked, unable to access basic services like savings, loans, or transfers.
Instant payment systems (IPS) offer a lifeline, enabling real-time, low-cost transactions 24/7. Globally, such systems are revolutionizing finance, but in Africa, they must be tailored to local needs—addressing challenges like low internet penetration, diverse languages, and informal economies. The continent now boasts 32 live IPS (29 domestic and three regional), processing nearly 32 billion transactions worth $1.2 trillion in 2022 alone. Yet, many remain at a “basic” inclusivity level, limited by functionality and participation barriers.
The Case for Homegrown Innovation: Beyond Imported Models
Reliance on foreign systems has long hindered Africa’s financial autonomy, often imposing costs and features ill-suited to local contexts. A recent peer learning visit in Lagos, hosted by the AfricaNenda Foundation and Nigeria Inter-bank Settlement System (NIBSS), underscored the need to champion African-built solutions. Attended by stakeholders from over 10 countries, the event highlighted how imported infrastructures overlook Africa’s unique realities, from rural unbanked populations to cross-border trade under the African Continental Free Trade Area (AfCFTA).
Dr. Robert Ochola, CEO of AfricaNenda, emphasized that financial exclusion is “not only unsustainable but unacceptable,” calling for scalable, interoperable systems designed for the vulnerable—women, youth, and informal workers. Premier Oiwoh, MD/CEO of NIBSS, echoed this, advocating for African-led innovations that transcend legacy frameworks and support seamless trade.
This push aligns with broader trends: mobile money transactions hit $1.1 trillion in 2024, with over 80 billion processed, leapfrogging traditional banking. Homegrown systems ensure affordability, security, and relevance, reducing fees and enabling features like USSD for low-data users.
Spotlight on NIBSS: Nigeria’s Pioneer and the National Payment Stack
Nigeria’s NIBSS exemplifies homegrown success. Processing nearly a billion transactions monthly, the 100% African-owned platform operates 24/7 with real-time clearing and robust security, serving banks, fintechs, and beyond. Its NIBSS Instant Payments (NIP) system has driven inclusion by integrating mobile wallets and traditional accounts.
At the Lagos event, NIBSS unveiled the National Payment Stack (NPS), a next-generation infrastructure building on NIP’s foundation. Oiwoh described NPS as a “foundational investment” in Nigeria’s future, promoting free trade and innovation. From 2014 to 2024, Sub-Saharan Africa’s account ownership surged from 34% to 58%, with IPS-equipped countries showing above-average growth.
Regional and Cross-Border Initiatives: Scaling Pan-African Solutions
Beyond Nigeria, initiatives like the Pan-African Payment and Settlement System (PAPSS) enable instant, secure cross-border payments in local currencies, reducing forex demands and boosting intra-African trade. Supported by Afreximbank, the African Union, and AfCFTA, PAPSS connects banks and providers, fostering transparency and revenue generation.
The State of Inclusive Instant Payment Systems (SIIPS) 2024 report by AfricaNenda, the World Bank, and UNECA identifies 28 domestic systems across 20 nations, plus 31 under development. In the CEMAC region, a new regional IPS promotes digital adoption for domestic and cross-border flows. Interoperability—linking mobile money to banks—is key, potentially including 400 million more adults.
Emerging partnerships, like Ripple’s stablecoin integration via Chipper Cash and Yellow Card, add compliant, instant options for remittances and DeFi. Airtel Money’s expansion with pawaPay powers remittances in seven markets, enhancing inclusion.
Expert Insights and Stakeholder Reactions: A Unified Call to Action
Experts like Crosby Mkwanazi of Standard Bank hail instant payments as Africa’s “heartbeat,” driving credit scoring, digital IDs, and governance. Nthabiseng Mohale, Standard Bank’s payments head, notes 70% of instant payments via USSD bridge the digital divide.
Social media buzz reflects optimism. AfricaNenda’s posts on X highlight IPS as a “game-changer,” linking Global Findex data to growth in accounts and digital payments. Users celebrate expansions like Aptos-Yellow Card for zero-fee stablecoin transfers across 20+ countries, calling it “massive for financial inclusion.” Discussions emphasize interoperability for remittances, with calls for mobile wallets to replace banks in underserved areas.
Challenges persist: regulatory hurdles, fintech licensing barriers, and ensuring mature inclusivity. Yet, the Lagos forum’s energy signals commitment to Pan-African collaboration.
Impact on African Economies and Lifestyles: Unlocking Potential
For Africans, homegrown IPS mean empowered lives—farmers accessing drought insurance via parametric tools, parents saving for school fees with interest-bearing wallets, and traders conducting seamless cross-border deals. Economically, they reduce remittance costs (from 10% via Western Union to near-zero), boost GDP through AfCFTA, and create jobs in fintech.
Lifestyle shifts include real-time remittances via USSD, reducing reliance on cash and enabling e-commerce. Politically, they support equitable growth, aligning with SDGs. Technologically, they integrate blockchain for stablecoins like cNGN, promoting borderless innovation. For youth and women, excluded at higher rates, these systems offer entry to formal finance, fostering entrepreneurship.
Conclusion: A Pan-African Path to Universal Inclusion
Building homegrown instant payment systems is not just technological—it’s a strategic imperative for Africa’s self-determination. Initiatives like NIBSS’s NPS and PAPSS demonstrate that African innovation can drive inclusion, reducing the 400 million unbanked and fueling sustainable growth.
Looking ahead, with 31 more systems in development and reports like SIIPS guiding progress, the continent is poised for a digital leap. By prioritizing interoperability, regulation, and local solutions, Africa can achieve universal financial access by 2030, turning exclusion into empowerment.