Mastercard, a leading global payment fintech firm, recently released a study report on the “Future of Fintech in Africa,” in its October 2022 edition. The study report added about the early-mover Africa who became a funding powerhouse in the region.
Mastercard Study Report
According to Mastercard’s report, Africa has enjoyed an early-mover’s position in the application of fintech in affecting financial inclusion and economic transformation.
The diversity of sectors that fintech addresses is represented in the firms that have now become a part of Mastercard’s suite of partners and customers, from cryptocurrency and open banking to data intelligence and identity solutions.
Matercard committed to provide help in fueling fintech acceleration by offering access to its expertise, network, and technology. The fintech firm supports Matercard’s strengths to be a portfolio of technology solutions, APIs, developer tools, partner network, and startup programs.
Matercard’s Three Key-Findings
The Mastercard report highlighted the three key-findings: Ecosystem, Funding, and Regulation.
Ecosystem firstly includes the information about Africa’s domestic e-payments market as the market is projected to see 20% revenue growth per year (Compared to 7% globally.) This may reach around USD 40 Billion by 2025.
The countries which lead the transition to digital payments are Kenya, Nigeria, and South Africa. It must be noted that more than 90% of jurisdictions in Africa established regulatory frameworks for digital payments.
And when the pandemic affected the whole world, 72% of African jurisdictions implemented the measures in respect of digital payments and international remittances. And, in South Africa, 85% of the residents said that they will continue to use digital cross-border payments after the pandemic.
Fundings that the continent collected in the Sub-Saharan fintech startups, recorded 894% of year-on-year growth in 2021. It is the second highest in the region of Middle East, Africa, and Pakistan.
However, Nigeria became a leading fintech hub across the Middle East, Africa, and Pakistan.
The fintech startup growth in Africa grew from 311 in 2019 to 564 in 2021. South Africa, Nigeria, and Kenya became the “Master Hubs.”
It can be seen that the fintech sector accounted for 27% of the number of deals closed as 61% of the USD 2.7 billion venture capital rolled out across Africa in 2021.
Regulation by the regulators across countries added a collaborative approach that enabled the introduction of new solutions by fintech firms.
The African market, which does not seem unified in terms of regulation, poses the challenges in scaling. As the Pan-African payment and Settlement System prove to be transformational for cross-border payments.
In addition, a survey states 53% of markets in the SSA region show that they “urgently needed” more regulatory support for eKYC processes. On the other hand, 65% of jurisdictions in Africa added that they had no plans to implement an open banking framework, compared to 30% of regulators in APAC and 23% in MENA.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/11/05/mastercard-released-a-report-on-african-fintech-sector-growth/