Africa’s payments landscape is undergoing one of the most profound transformations ever seen in global finance, with mobile money and fintech technology being rolled out faster than anywhere else in the world.
The continent’s banking markets offer more attractive environments for disruptive technologies because there is less legacy infrastructure – especially in terms of credit and debit cards – to displace, so it seems likely that payment delivery will skip straight from cash to digital, in contrast with the rest of the world.
By historical standards, the expansion of banking services in Africa is truly remarkable. The range of technologies, from agency banking to mobile money and digital banking, is helping to bring financial services within the reach of an ever-increasing proportion of the population.
These delivery methods take advantage of technological innovation but also seek to provide services to those without reliable access to electricity, the internet or mobile reception. The change is nothing less than a financial revolution and encompasses millions of people who were previously locked out.
Unlike mature markets such as Europe or North America, where entrenched card networks dominate, Africa’s relatively underdeveloped traditional financial systems have created a unique opportunity for technological leapfrogging. The fact that so many people have not had access to financial services means that providers do not have to persuade them to switch from one conduit to another.
Individuals can merely start from scratch with whatever delivery method they choose. As a result, many African economies are not moving from cash to cards to digital platforms; they are skipping cards altogether.
The idea of leapfrogging stages of technological development is fairly well known in Africa. Progress on rolling out conventional telecoms infrastructure has been very slow across much of the continent, with the queue for a landline often stretching many years.
As a result, most people have ignored fixed line systems in favour of mobile technology, which in any case has huge advantages. While work on installing high-speed broadband lines is continuing in some areas, the focus of investment and use is heavily on mobile telecoms.
Credit cards in Africa
Almost half the population of Africa lacks access to formal bank accounts, restricting access to traditional debit cards, as cards tend to be linked to bank accounts. Banking penetration rates, including mobile money, range from as low as 6-9% in South Sudan and 13% in Guinea and Sierra Leone to 90% in both Kenya and Mauritius. Africa is also attractive for disruption because large unbanked populations create huge growth potential.
Despite rapid innovation, cash remains the dominant payment method across most of Africa. Estimates vary but it accounts for 70-90% of all transactions on the continent.
There is a strong preference for cash because of high card transaction costs for both consumers and shops, and limitations in the reach of physical banking sector infrastructure. It is often preferred because of lack of trust in other payment methods and habit, while its anonymity makes it particularly popular among informal traders. Cash-on-delivery is still common, even in e-commerce.
Credit cards began to take off in Western economies in the 1960s and 1970s, providing both a payment method and credit. Yet progress was very slow in Africa and today the continent has the lowest credit card penetration rate of any region, accounting for just 3% of all transactions.
Credit cards depends on the availability of credit scoring systems and consumer lending markets, which are limited across most of the continent, while the lack of credit card use also reflects widespread cultural aversion to debt.
Debit cards were devised to allow direct payment from bank accounts without any lending element and became popular in the US and Europe in the 1990s. These are more popular than credit cards in Africa but their penetration is still limited to 18% of all payments in sub-Saharan Africa, in comparison with a global average of 51%, according to digital payments provider Onafriq.
That 18% is highly concentrated in specific markets, such as South Africa, Egypt and Morocco, and they play an important role in higher- income segments and for international transactions in many other countries.
Debit card use varies from more than 80% of the population in Mauritius to just 1.4% in Sierra Leone. High currency volatility in countries such as Nigeria and Ghana makes international card payments difficult, while the point-of-service terminals needed to support debit payments are expensive.
The total annual value of card transactions in South Africa was forecast to reach R2.9trn ($158.8bn) last year, according to Global Data, up from $149.4bn in 2024, on the back of higher consumer spending and more merchants accepting cards.
South African card-holders also use them more frequently than their counterparts anywhere else on the continent, with 118.1 transactions per card in 2024, far higher than Nigeria’s 51, Egypt’s 24.2 and Kenya’s 5.3.
Debit cards accounted for 74% of South African card use in 2024, with credit and charge cards capturing the remaining 26% out of the 68.4% of the population who use payment cards.
Beyond credit and debit cards, there is demand for cards in the form of prepaid cards, which do not have to be linked to bank accounts and which have become more popular. The combined Nigerian prepaid card and digital wallet market is forecast to reach $15.2bn this year, up 17% on 2025, according to analysts Research and Markets.
Virtual prepaid cards, which exist only in digital form, have also become more popular as they are cheaper for providers and more secure against fraud.
Beyond cards and cash
Aside from cash, mobile money and fintech services are both very popular in Africa. Indeed, mobile money is the dominant digital payment method on the continent, accounting for 38bn out of 41bn instant transactions in 2023, with a total value of more than $1trn.
Africa accounts for more global mobile money activity than the rest of the world put together, hosting 74% of transactions. Mobile money even accounted for about 50% of e-commerce payments in Kenya, where other digital payment methods might be expected to dominate.
Mobile money began with M-Pesa in Kenya in 2007 and is now offered by a multitude of other providers, including Orange Money and Airtel Money. Mobile money systems can be used on basic phones, avoiding the need for a formal bank account or smartphone, offer low- cost transactions and are accessible by unbanked people. They allow users to store value in a mobile wallet, send and receive money via SMS or apps, and pay for goods and services.
ATM networks are becoming more common but these are expensive to procure and maintain. In relatively developed economies such as Ghana and Côte d’Ivoire, more people now have mobile money accounts than traditional bank accounts.
In mature markets, fintech disruptors must compete with established banking systems, extensive card networks and established consumer card habits built over decades, while these factors generally have a fainter footprint on the African continent. This creates a greenfield environment where new technologies can be rapidly scaled to become default payment methods.
The first wave of African fintechs focused on payments, while providers are now expanding into lending, savings and insurance in order to increase their average revenue per customer. Mobile money and fintech providers have put huge pressure on traditional banks to up their digital games, either by building their own platforms in-house, or partnering with fintechs.
The uptake of crypto currency is also growing faster in Africa than anywhere else in the world, while agency banking helps extend the reach of financial services into rural areas. Africa’s payments ecosystem is highly diverse, reflecting differences in economic development, infrastructure and financial inclusion.
Africa’s payments landscape is very different from that in developed markets. The relative absence of entrenched card infrastructure has created a very fertile environment for disruptive technologies. Rather than competing with legacy systems, African fintech innovators are building entirely new ecosystems, often tailored to local needs and constraints. Much of the continent appears to be bypassing traditional card-based systems in favour of digital platforms. Mobile money, digital wallets and fintech solutions are not just alternatives – they are becoming the default.
However, this transformation is not uniform. Cards still play a role in more developed markets, and cash remains deeply embedded across much of the continent. The future will likely be hybrid but increasingly digital.
Ultimately, Africa’s payments revolution is not just about technology. It is about inclusion, accessibility and reimagining finance for those who are entering the formal financial system for the first time. As in significant other ways, Africa is not merely catching up with global trends, it is using its reputation for financial innovation to help define the future of global payments.