There is a traditional African proverb which says, ‘If you want to go fast, go alone, but if you want to go far, go together.’ This perfectly captures the power of collaboration and how uniting for progress is allowing fintech companies, traditional banks and financial institutions as well as technology firms to combine resources and expertise to address complex challenges in the African payments sector to unlock the continent’s vast economic potential.
The relatively low number of the African population that is part of the formal economy with bank accounts and the low technical base from which the continent comes have led to significant, rapid growth and transformation in Africa’s banking sector. There nevertheless remain a number of hurdles which confront the sector, but by presenting a united front, the industry’s key stakeholders have been able to identify and resolve issues including infrastructure gaps, regulatory and compliance obstacles, and building the trust of a new customer base.
EFT Corporation’s 2024 Banking on the Future event took a deep dive into the dynamic payments environment and emphasised the need for greater collaboration to harness its full, massive potential.
The shifting digital ecosystem & its challenges
The rate of Africa’s adoption of digital technologies is exceptional in the global context. It is being driven by the growth of internet penetration as networks and undersea cables connect more people to online social and commercial communities, as well as by the increase in cell phone usage, particularly among the young, tech-savvy digital natives who comprise around 60% of Africa’s population. However, this growth has also posed unique challenges that the continent has found unique ways to overcome, with regional solutions for regional problems.
These challenges include infrastructure gaps which, despite the increased online presence of millions of Africans, include limited connectivity, especially in rural areas. Although banking systems in some African countries are robust, the legislative framework around the continent is diverse and inconsistent, making the cross-border trade and commerce space a complex one to navigate. Customer trust among the millions of previously un-banked, who have low levels of financial literacy and who historically were outside the formal economy, remains a singular challenge. The launch by fintechs of a variety of safe, secure, and seamless mobile baking solutions, neobanks and other financial services has extended financial inclusion to many millions of these African consumers, earning their trust by delivering user experiences to which these newcomers to the sector can relate.
The role of collaboration
Bringing their own particular strengths to the table, each of the stakeholders in the digital payments sector has an important role in taking it forward and in contributing to the continent’s economic stability and development.
- Fintechs operating in the sector bring innovation and agility but can lack the ability to scale and do not have existing customer bases.
- The traditional banks bring customers whose trust is well established, however, their reliance on traditional processes can pose challenges in keeping pace with the rapidly evolving financial services offered by non-banking apps and other platforms.
- The large tech companies that host the fintechs, offer scalable and secure solutions but do not have financial sector-specific insights for tailoring to customer and market demands.
Through cross-industry collaboration between these players, the challenges of the payments sector in Africa can successfully be addressed. In addition, other collaborative, symbiotic relationships, including between telecom providers and financial institutions, retail chains and neobanks provide a win-win scenario for businesses and consumers alike.
These partnerships not only drive innovation but also create a competitive edge by combining agility, trust, and scalability in a way no single entity can achieve alone.
Integrated solutions for seamless banking
Market demands for seamless online user experience sites which offer a range of financial services, have led to the creation of integrated platforms with technical interfaces that allow a range of financial activities. The interface between the commercial entity and the financial service provider through an application programming interface (API) allows e-commerce sites to offer tailored customer transactions, including insurance, savings and investment opportunities, microloans, mobile money and more, all via the click of a button. This is another example of industry collaboration that is reshaping consumer interactions with financial services.
Collaborative case study: EFTCorp and Diamond Trust Bank
EFTCorp’s partnership with Diamond Trust Bank (DTB) leverages both DTB’s regulatory expertise and customer trust and EFTCorp’s cutting-edge fintech solutions which together have enabled the launch of transformative services such as plug-and-play wallets, SME business tools, and a robust consumer banking platform. EFTCorp’s Eclipse platform – a cloud-native, API-first SaaS solution – allowed DTB to rapidly digitise its offerings, providing scalable, secure, and user-centric financial solutions tailored to local market needs. This partnership not only highlights the power of combining traditional banking strengths with fintech agility but also demonstrates how strategic collaboration can accelerate financial inclusion, improve operational efficiency, and create innovative pathways for growth across the continent. Together, DTB and EFTCorp have set a precedent for addressing the triple challenges of infrastructure gaps, navigating regulatory complexities, and meeting the evolving demands of Africa’s digital-first customers.
Collaborative case study: EFTCorp and Visa
The partnership between Visa and EFT Corporation serves as a compelling example of how global leaders and local innovators can collaborate to accelerate fintech growth and financial inclusion in Africa. With Visa providing its vast global resources, investment, and expertise, and EFTCorp leveraging its deep understanding of African markets and comprehensive technology stack, this collaboration aims to unlock transformative potential across the continent. By enabling fintechs with tailored card programmes, cutting-edge technology, and access to robust support systems, the partnership positions these innovators to overcome market challenges, scale rapidly, and deliver impactful solutions. This collaboration is not just about bridging gaps in financial services but setting a new standard for how partnerships can drive sustainable growth, innovation, and inclusivity in Africa’s burgeoning digital economy. Together, Visa and EFTCorp are creating a blueprint for public-private cooperation, emphasising the power of shared goals to shape the future of financial services on the continent.
Through all its partnerships, EFTCorp’s primary mission is to empower more previously underserved Africans by making available financial products and services that bring them into the local, regional and global economy. Increased financial inclusion boosts economic activity on the continent which in turn drives economic growth and prosperity for all. Making financial products available through digital channels and platforms that are user-friendly, fast, safe and secure lays the foundation for this growth. As levels of trust and satisfaction among merchants and consumers for new payment models grow, it creates a fertile market for more innovation, perpetuating the growth cycle.
No single organisation can take on the massive challenges that the complexities of operating in Africa present. In the digital banking sector, it is only through collaboration that these challenges can be overcome, and the potential of the sector be realised, EFTCorp’s work with Visa and DTB is a testament to the success that working together brings.
Africa’s innovative approach to digital transformation, coupled with the enthusiasm of consumers and service providers to embrace technology, is positioning the continent as a leader in the payments sector. This energy is driving advancements and setting benchmarks for the future of financial services globally.
