04 Aug Digital Payments Going to Transform African eCommerce Payments?

Are Crypto Currencies, Digital Currencies, Virtual currencies going to disrupt online payment for eCommerce by multinational ecommerce companies across Africa anytime soon.  At the time of writing this I am currently in full swing with my Msc in Digital Currency thesis “The Future of Online Payments Across Africa”. The focus on online payment for eCommerce in Sub-Saharan Africa and how traditional payments, and new digital currencies, decentralisation, blockchain and smart contracts might change the payments landscape and the way we do business.  

How M-Pesa in Kenya, Cards and NIBSS bank debits in Nigeria, and cards and automated EFT payments in South Africa for eCommerce might live alongside digital currencies like bitcoin, Monero, Dash and wallets and second layer solutions like Lightning Network  . . or will these traditional eCommerce payment methods be disrupted and cease to exist?

Digital currency systems are typically decentralised and their drivers tend to be of a libertarian, or even anarchistic bent.  Are these currencies going to have a life of their own, enabling consumers to live in a borderless, anonymous world of more payments than their existing sometimes very unstable, government controlled fiat currencies and traditional banking systems?

Whilst this view is liberating and possibly attractive for consumers there is the view that the long arm of the law and KYC and AML requirements will prevent this free for all from happening anytime soon. Even for a coin like Facebook’s Libra which if we ignore legislation could instantly enable half a billion African consumers.   It will take a wholesale collapse of an economy like in the case of Zimbabwe for cryptocurrency to get immediate and significant traction as has happened in Venezuela.  

The primary eCommerce payment economies where most of our ecommerce merchant volumes take place like Nigeria, Kenya, South Africa are relatively stable and quite strictly governed with serious consequences for any actors that might operate outside the law.  

So to keep a long story  short, it is my opinion that whilst Africa is a hotbed for fast track digital currency adoption relative to the more mature global economies, traditional payment methods will have a large role to play for many years to come.

So for multinational eCommerce companies expanding to Nigeria, Kenya and South Africa, the best online payment methods are as follows:

Nigeria - card and bank debit (USD and NGN)

Kenya - card (USD and KES) and M-Pesa (KES only), Airtel Money 

South Africa - card (ZAR only . . acquiring in other currencies is not permitted)

If you are a multinational eCommerce company looking to expand to Africa for your online payments then Contact African Payment Solutions now