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 has been the leader of mobile money for almost a decade. This is largely due in part to the growing number of fintech companies that are offering digital payment options to those who don’t have credit or a savings account. According to Fintech Times, approximately 57% of the country’s population do not have a traditional bank account. Comparatively, only 57% of the country’s population have a traditional bank account. 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.
Combining the African continent’s high acceptance of mobile banking services and its youngest population globally, this raises awareness about crypto currencies. 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 and service providers across the telecommunications landscape and in financial services have many opportunities.
The adoption of cryptocurrency currencies has exploded, especially in emerging countries. Chainalysis, a blockchain data company, reported a global adoption growth rate of over 2300% between Q3 2019, and 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.
The buzz around crypto began long before the introductions of the eNaira. Akon, the Senegalese-American singer-entrepreneur announced his plans to develop a cryptocurrency-powered city and blockchain in Senegal in 2018. 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 and Akoin are hot topics, but Bitcoin dominates conversations in Africa about crypto currencies. Bitcoin accounts for 63%, Ethereum (9%), 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.
Fintech is expected to grow in importance as technology improves infrastructures and sustainable developments. 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. Like any other marketing venture, brands must demonstrate their value to consumers and work hard to keep their loyalty.