For consumers around the globe, mobile phones have become ubiquitous—providing instant, real-time access to information, social networks, entertainment and connectivity. In Africa, the world’s second-largest mobile market behind Asia, that connectivity has super-charged the mobile money industry, with Sub-Saharan Africa (SSA) now accounting for 43% of the world’s active mobile money accounts.
The widespread adoption of mobile payment (m-payment) services, which accelerated during the COVID-19 pandemic, has many Africans looking to crypto currencies as a natural next step—one that’s removed from conventional banking systems and offers protection against currency devaluation. In fact, social buzz around the term “crypto” across several African countries has been rising this year, fueled by the introduction of a range of high-profile digital currencies, settlement platforms and blockchain applications.
SSA is a leader in the mobile money sector for more than a decade. This was largely due to a growing number of fintech firms that have stepped up to offer digital payment options to customers who do not have access to a savings or credit account. The Fintech Times, approximately 57% of the country’s population do not have a traditional bank account. The contrast is the Wall Street Journal reported late last year that SSA alone is now home to nearly half of the world’s 1.04 billion registered mobile money accounts.
Due to the high use of mobile banking services on Africa and the young population, crypto currencies are becoming more popular. And given these are the world’s youngest consumers, digital payments and crypto currencies represent far greater appeal than traditional banking offerings. Digital payments and crypto currencies offer financial freedom and independence to these consumers who are mobile-first, and they have high hopes for the future. Providers, platforms, services and platform providers across the telecommunications landscape and in financial services have many opportunities.
Blockchain data company Chainalysis reported that crypto currency adoption has increased dramatically, in particular among emerging economies. The global adoption growth for the cryptocurrency was more than 230% between Q3 2019 – Q2 2021. Africa represents the world’s smallest crypto economy (2% of global value), but the prominence of this form of money is accelerating adoption. In fact, Nigeria, Africa’s largest economy, recently became the first nation on the continent to roll out its own digital currency: the eNaira.
However, the buzz surrounding crypto was already there long before the eNaira’s introduction. Akon, a Senegalese-American singer/entrepreneur who announced in 2018 plans to create a crypto-currency-powered city in Senegal. Consequently, Akon’s “Akoin” currency that he wants to power Akon City, his planned sustainable smart city in Senegal, is among the most popular crypto topics that SME has been tracking across the media landscape.
Akon, Akoin and other crypto currencies are popular, but Bitcoin remains the most talked about in Africa. Bitcoin accounts to 63% of all conversations about digital currency. Ethereum (10%) is second, and Doge (7.5%). Additionally, digital currency sentiment is generally neutral or positive among consumers. While growing and lucrative—even sanctioned by governments—the crypto landscape is fertile for scams, with many attaching themselves to aspects of pop culture, including the recent Squid Game cryptocurrency.
The role of fintech in emerging countries will increase as technology develops infrastructures. Strategy&, PwC’s consulting business, expects cashless transaction volume in Africa to increase 78% through 2025 and then 64% between 2025 and 2030.
With so much opportunity ahead, businesses will need to develop and maintain meaningful relationships with consumers, given the wide—and growing—range of options available to consumers. Brands must prove themselves to customers, maintain consumer loyalty, and be at the forefront of all marketing activities.