Few people in the industry appreciate the scope of work that has been undertaken by countries over the past two decades to create instant payment systems and the tremendous benefits these systems have brought to domestic economies and global growth.

We have covered some aspects of this in prior podcasts including, as one example, the three-part series we did on Brazil’s Pix system which has been nothing short of transformational. Progress continues globally, but there is also more work to be done… and more opportunities for economic growth ahead.

In a series of episodes, Glenbrook’s Joanna Wisniecka will to bring you up to speed on what’s happening globally as countries modernize payment networks and reach individuals and businesses through faster payment systems.

In case you missed it, we encourage you to listen to our first episode in this series – a conversation with Michael Wiegand, the Director of Inclusive Financial Systems at the Gates Foundation.

And in this episode, Joanna welcomes Sabine Mensah, Deputy CEO of AfricaNenda, a leader in financial inclusion, to explore Africa’s dynamic path towards inclusive instant payment systems and the need for continued innovation and collaboration to enable access to financial services for all Africans on the continent by 2030.

 

 

Joanna Wisniecka: Hello, I’m Joanna Wisniecka, an Associate Partner at Glenbrook, and your host for this episode of Payments on Fire.

The scope of work that has been undertaken by countries over the past two decades to create instant payment systems or IPS and the benefits these systems have brought to domestic economies and global growth has been tremendous.

We covered some aspects of this in prior podcasts, including in a three-part series on Brazil’s Pix system. The impact of that instant payment system on Brazil has been nothing short of transformational. Progress continues globally, but there’s more work to be done, and that means more opportunities for innovation by private and public sector.

That is why I’m hosting this series, to bring you up to speed on what’s happening globally as countries modernize payment networks and reach more individuals and businesses. We will cover what makes these modern systems more inclusive and better able to serve the needs of all end users, what makes them more gender intentional, what roles the private and public sector play, and what research tells us about where further progress is needed.

In case you missed it, our first episode in the series was a conversation with Michael Wiegand, the Director of Inclusive Financial Systems at the Gates Foundation. I encourage you to take a peek at that episode for a thoughtful discussion on the foundation’s impactful work in this space.

In that episode, we reminded our listeners, in addition to the payments advisory and education work most of you know Glenbrook for, we also lead a practice that provides consulting to global central banks, NGOs, and other organizations to establish and scale payment systems for countries worldwide. We are quite proud of the work we do in this space and the incredible change makers we have the privilege to partner with in the pursuit of greater financial inclusion.

And with that, for this episode, I’m delighted to have Sabine Mensah joining me. Sabine is Deputy CEO at AfricaNenda Foundation, an Africa-based, Africa-led nonprofit organization, and a leader in financial inclusion. Sabine, welcome to Payments on Fire.

Sabine Mensah: Well, thank you very much. It’s a pleasure to be here.

Joanna Wisniecka: Let’s jump right in. Let’s talk about you first. Your career reflects a consistent commitment to financial inclusion and deep expertise in mobile money and digital financial services. Can you describe for our listeners your career journey and how it brought you to your current role at AfricaNenda Foundation?

Sabine Mensah: Sure. My best friend name is Alice and I went to elementary school and middle school with her. And after middle school, our path changed and she was no longer able to go to school. So at a very early age, I associated access to finance with access to education, access to, healthcare, access to having food on your table.

So I told my parents early on I wanted to be a banker, and I went in and, I studied, in finance and then went in and did Master of Business Administration. And my first job was indeed a financial analyst in a commercial bank. I lasted six months.

And with the understanding that in Africa to bank the masses, we don’t necessarily need a bank. We need to find other innovative ways to reach people where they are with whatever infrastructure they have. And at the time, looking at the evolution, a mobile phone was that infrastructure that was most common in people’s hand. And really I went from starting at the bank and moved on to work in the remittance space with Western Union, enabling instant remittances, cross border payments and started working in Africa and then moved on to the US and ended up in Canada as a regional director for global remittances.

And even with that history, I always kept thinking, if a mobile phone, as simple as a tool as a mobile phone can provide banking to people where they are, why aren’t we leveraging this more?

And history actually worked towards that because with the emergence of M-Pesa in 2007 and looking at the growth of mobile technology and mobile financial services in Africa, so I found myself, in 2013, coming back to Africa and consulting for the mobile money industry and working with mobile financial service providers in the space of how do we enable more financial inclusion of unbanked population. And that led me to work with the United Nation Capital Development Fund in Senegal.

And while I was at the UNCDF, I kept thinking again, I’m really liking what I do and working in financial inclusion and digital economy. But the biggest barrier people have, typically it is at the infrastructure level, having access to the infrastructure. Because you need access before you can use. Without access, there’s no usage, of course.

So, that led me to really embrace the opportunity with AfricaNenda in 2021 working with fellow African leaders to build an organization that’s really focused on the development, the design, and the scale of inclusive instant payment systems across Africa.

So, still in my journey for financial inclusion, now working at the infrastructure level, and really, I am still convinced that we can enable financial access to all Africans by leveraging digital technology across our regions.

Joanna Wisniecka: Wow, Sabine. That is certainly a career driven by passion. And you’ve been there really from the start. Anytime you mention M-Pesa, we know you were there, right? Right at the heart of the action.

You mentioned AfricaNenda was established in 2021. And it was established to accelerate growth of instant and inclusive payment systems. And ultimately, as you say, to bring financial inclusion to more Africans, men and women, and those of us in this space know that is a big, important, and aspirational goal.

I love that you started with the story and let’s continue in that thread. How does AfricaNenda’s work relate to someone’s everyday life? Can you anchor the role of instant payment systems in some real life stories from the continent?

Sabine Mensah: Absolutely. And maybe let’s start with my story. Couple years ago I was traveling for an event. When I arrived it was a Sunday. And I went into a hotel and while I was waiting to get a room, my purse was snatched. And in that purse, I had my passport, all my credit card, all my cash, everything.

So that Sunday afternoon, after that incident, I think I felt the most vulnerable in my life because I had no money, so I could not get a room at the hotel. I couldn’t even ask somebody, my family, to send me money because there was no way for me to identify myself if I went somewhere to pick up a money transfer, for instance. I had no credit card, couldn’t go to a bank and debit anything.

For a couple hours, I walked in the shoes of an unbanked person. And it really, really made me realize how vulnerable one can be living on the cash economy. Vulnerable to shocks that can happen such as mine, but even more shock whether it is COVID-19, whether it is having your livestock taken because there’s a drought and not being able to pay for your education fees and then having to have a very bright woman, such as Alice, not go to school.

The realization for me was at the time that there are over 400 million adult Africans for whom that is their everyday life in the cash economy, in the informal economy. And what it means for them is really not being able to fully embrace, the opportunities of the formal financial ecosystem and having access to more resources through lending, having access to safeguard their funds through savings, having access to protect themselves with insurance. All of these, sometimes I think we take it for granted for those of us who have access to it, while we need to recognize that there are a lot more people who don’t have access to it.

And for me, instant payment is the infrastructure layer that can enable you to send a financial transaction in near real time, 24 hours a day, 365 days, and for the person to also receive this instantly, whether it’s a transfer to a person, or it is a digital payment that you are making. So, that’s where I see an opportunity for us to collectively come and accelerate financial inclusion.

At AfricaNenda, we are a team of 21 employees. You are spread across 11 countries in Africa, and we’re really tackling the issue of enabling inclusive instant payment system through providing technical assistance, enabling capacity building of the different stakeholders, working with central banks, regulators, policy makers, as well as digital financial service providers and ecosystem partners to really ensure that these infrastructure are enabled, are inclusive, are accessible, are affordable to the more than 400 million Africans that we are trying to onboard in their financial inclusion journey.

Joanna Wisniecka: That is wonderful, bringing it to real life. And since we’re on the subject, you mentioned the example of a person-to-person transfer, potentially also paying a merchant, paying a hotel, the ability to do that. Instant payments are often equated with those person-to-person transfers. And indeed many instant payments do start with that use case.

But we’re witnessing that more established systems are processing transactions across a variety of use cases. Various reports highlight the massive growth opportunity in Africa for digital payments of all types. We know merchant payments, for example, are becoming increasingly important.

What use cases are you seeing emerge as the most transformational for individuals and businesses and governments?

Sabine Mensah: Well, every year we do a research on the landscape of instant payment systems in Africa and the hope is for us to really build the storyline of the evolution of these instant payment systems in Africa. And through that research, for the last three years, what we’re seeing, and you’ve said it earlier, is that, person to person.

So my ability to send you money or for you to send me back money, person to person transactions are typically where the instant payment systems start in terms of. The primary use case. Now in our 2024 SIIPS report, we have landscaped about 31 instant payment systems across Africa, and all 31 of them have the person to person use case enabled.

Now, typically after the person to person use case, it’s usually the person to merchant use case, so our ability to pay for goods in a store or wherever for that matter, that comes into play. Then there are some other use cases, but for instance, when we look at the landscape out of the 31 instant payment systems in Africa, there were only 24 of these systems that had the person to merchant enabled in the system.

And then when we go and look at what happens next, when you are half person to person and person to merchant, we see that there are about person to billers. So my ability to pay electricity bill or water, for instance. Or person to government, my ability to pay fees to the government, that’s also a use case.

And it’s about 19 of these instant payment systems to have those use cases enabled. Now from a financial inclusion perspective, government to person, so the ability to digitize social benefit payment is a key lever that governments can use to bring more people, and particularly more women, within the financial inclusion or the formal finance, enabling them to have access to an account.

Unfortunately though, when we look at the 31 instant payment system, only six of them had the government to person use case enabled. So definitely an opportunity there for the ecosystem to digitize more. These are government to person payments enable more digitization of social benefits through instant payment system to enable more people to have access to finance.

When we look at the financial gap, when I talked earlier about the 400 million Africans, about 60% of them are women. So there’s definitely an opportunity here in the digitization journey of most governments in Africa to enable government to person payment into instant payment system.

I think when I look at it, honestly, I say to myself, What do we do with our cash? Yes, we give it to somebody. So that, for me, translates to person to person. We buy food, we buy services, percent to merchant, person to businesses. We also pay the government for everything we owe, but also, enabling the government to pay.

We have a responsibility if we really want to increase the adoption of digital payments, digital financial services, to provide more value than what one can do with cash. And that is where the opportunity to digitize as many of the use cases as possible. Looking at the value chain of what we do with cash, then we will provide an incentive for people to move from cash economy to a formal, digital economy because of these values, additional values that we’re bringing with digital.

Joanna Wisniecka: What this really highlights for me, across these use cases, is the role that so many different players need to play in order for this to work, right? The instant payment, the rails need to be in place. But you mentioned the government, businesses, fintechs that need to enable the. end user experience.

This is a real ecosystem effort. Can you talk just a little bit about what you’re seeing in Africa in terms of just these different players coming together towards the same goal, even though their ambitions ultimately as businesses might be different from the policy objectives for a government?

Sabine Mensah: It’s a very interesting, it’s definitely an ecosystem play. Definitely. And you look at the evolution of the financial ecosystem in Africa prior to let’s say 2010, was mostly bank led and also with limited bank population access. And then after, of course, 2007, mobile money, when you look at around 2010, you see now an ecosystem where you have banking, solutions, but also mobile driven solutions in that ecosystem driven by mobile operators, mobile wallet providers, fintechs, that are coming in on board.

And if you move forward to 2020s, those innovators are even leading the way in terms of providing customized financial solutions that can really serve the unbanked consumers and bringing niche rails but solving real consumer problems where we are. So when we started in 2021, I think for AfricaNenda, the biggest question we had was how do we understand the different players in this ecosystem? How do we understand where we are? What’s the baseline? What’s the landscape looking at? And then understand, of course, the incentive for each of these players. To know enough of it, to be able to influence, whether it’s through research, whether it is through advocacy, whether it is through capacity building or technical assistance.

So we started where financial ecosystem, financial service providers, of course we know that regulators are key. But it’s interesting because even on the regulation side, we are a crossroad. We have the financial regulator, the central banks, but we also have ICT because we’re using mobile rails to fit in there. We also have the technology regulators also that are at the country level or regional level that comes into play. Then you look at, Well, how about data? Because we are moving data. How about privacy? Because hey, we are talking about consumers’ data and do we have the right to use this data?

So, a lot of stakeholders are coming into the ecosystem and what we at AfricaNenda are doing is really working with the regulators, government agency, private sector associations because we really think that it is for the body of the ecosystem, not the individual private sector, actors themself, but for the industry that we are working and engaging with them.

And we also engage with development partners that are in the ecosystem contributing on financial inclusion, digital payment coming in into the ecosystem and really understanding there is strength and power in numbers in terms of advocacy so we are looking for the coalition of the willing to support the journey of financial inclusion through the development of inclusive instant payment system at a country level, at a regional level. Working with all the different stakeholders who need to come and sit at the table to be able to make sure that we are designing for inclusivity and we are designing for a future where digital transformation in Africa leaves no one behind.

Joanna Wisniecka: It really will take a village.

Sabine Mensah: Absolutely.

Joanna Wisniecka: I want to keep going a little bit with the use case thread here. And one of the use cases that maybe doesn’t immediately come to mind but it’s hugely important is the cross-border use case and it’s really essential end user need for remittances and for trade.

An important enabler for cross border instant payments has been the African Continental Free Trade Agreement which was signed in Kigali in 2018, its purpose to create a single market for goods and services, and a payments infrastructure that can support that is an important aspect.

How has this agreement spurred cross-border payment innovation across the ecosystem? So all the different players you just mentioned, by public and private entities?

Sabine Mensah: It’s a great question, Joanna. I always say when we’re talking about trade, there is no trade without payment because at the end of the day, at the end of that transaction, somebody needs to pay, somebody needs to be paid, whether it’s an individual, whether it’s a business, whether it’s a government for that matter.

So I see the Africa Continental Free Trade Area as a great opportunity to open the African market, 1.5 billion other people in Africa, to anybody who has the opportunity to provide goods and services that can serve beyond their own frontiers or borders of wherever they are in Africa.

So what I’ve seen with the Africa Continental Free Trade Area is an opportunity for the ecosystem to come together to enable seamless cross-border payment systems so that the millions of MSMEs, the millions of individual entrepreneurs, and millions of companies that are there can really leverage these payment rails to increase their opportunities through intra Africa trade. The AfCFTA secretariat had actually put together a working group where AfricaNenda was represented to work on the digital trade protocol. So really looking at how do we enable digital trade beyond physical trade as well.

We’ve contributed by seconding trade lawyer and a technical lawyer, but also having a teammate presence in working on a digital trade protocol, which was a sign of earlier in February 2024. And in the digital trade protocol, you also have some annexes, some particularly touching cross-border payment, cross-border data transfer among other of these annexes.

I think it really lays down the foundation for that ecosystem to come together, for seamless cross-border payment solutions to come together. Not that there aren’t any. But I think it certainly will help overcome some of the barriers we’re seeing in enabling cross-border payment, what these barriers are from an operational perspective for the financial service providers, or it’s regulatory perspective as well, because of course you’re moving from one country to another and regulation is different from both sides and really looking at how we enable more of these solutions and more innovations to come into the ecosystem because the market is open and it’s a great opportunity to improve intra Africa trade.

From our perspective, I think it also opens up an opportunity for these instant payment systems because with working with the SIIPS report, what we find out, for instance, in our 2024 report is that we have 31 instant payment system live in Africa. 28 of those are domestic, are country level systems, and three are regional systems. So the three regional system are already enabling cross-border payment. For instance, in Central Africa, the GIMACPAY is enabling cross-border payment between the six countries. You also have the TCIB in the SADC region, where it’s enabling also cross-border payment. And we have PAPSS, which is enabling cross-border payment at the Pan-African level.

But there’s also the fact that at a country level, in a scenario where we are able to interconnect these country instant payment system, we can also enable cross border payments. So I think the AfCFTA offers a great opportunity and works on foundational layers to really bring that ecosystem together. But I think it is also up to us, these ecosystem players, the regulators, the financial service providers to really step up and take this opportunity to facilitate interoperability at a Pan-African level, at a sub-regional level, and really offer rails that traders, businesses entrepreneurs, can leverage to provide more cross-border payments.

So I’m looking forward to a day that we have more systems from a statistics perspective. For instance, when we looked at the landscape, only six of the instant payment system were also enabling cross-border payment across Africa. Outside of the three regional systems, you had three other countries that enabled cross-border payments.

So definitely a lot more needs to be done there from an instant payment systems. But I also want to acknowledge that there are challenges from a regulatory and operational perspective that our providers need to deal with, for sure.

Joanna Wisniecka: That’s right. Tons of barriers, a number of global efforts to address the known barriers in cross-border payments and low cost is one of those, right, that is certainly one of the aspects or design motivations for domestic payments. In cross-border payments, that becomes even more important given you’re typically dealing with additional currencies, FX, and others.

What other barriers remain to be addressed? One of the aspects of cross-border payments, it’s challenging again, also at the domestic level, to bring all of these different counterparties together towards a single goal.

Presumably it’s even more complex at the cross-border level. You’re working across jurisdictions. So that, certainly, I would imagine as one barrier. What other persistent barriers need to be addressed?

Sabine Mensah: Well, I think for me, if I want to look at it from the AfCFTA opportunity, one of the biggest barriers I see is really regulatory policy and regulatory harmonization in the payments ecosystem in Africa. For instance, when we look from one country to another, the licensing regime for fintechs or for payment service providers is different.

So if I’m a provider in country A and I want to enable cross-border payments and I go to country B, the licensing regime is different. Country C, it’s different. The timeline is different. So the ecosystem is not necessarily enabling the expansion of cross-border payment providers from different countries.

If we had more regulatory harmonization and perhaps some type of mutual recognition of the steps that are taken in countries for one license, perhaps there is a pathway to enable a faster licensing process in different countries and therefore enabling even more competition and more innovation and cross-border payment.

If you look at it also from a regulatory perspective, the know your consumer or a consumer due diligence framework from country A to country B are different, and we are talking about instant payment system, instant cross border. So because of these differences, that instant transaction can stay in the digital stratosphere far longer than instant because, there’s a lack of harmonization in those requirements from one country to the other.

This also applies to the consumer recourse mechanism. If I’m a consumer and I’m sending a cross-border transaction, what is my recourse where I am sending a transaction if it doesn’t go through, but there’s the recourse for my recipient on the other side. And where is that harmonized to enable a seamless, transaction journey from a sender to receiver standpoint.

And of course, you also mentioned for FX, foreign exchange. We have different currencies in countries in Africa, so how do we help bridge that gap in enabling a faster and seamless cross-border payments? And I think from a regulatory perspective, that’s where I see the most significant barriers, but also the best opportunity for us to resolve and enable seamless cross border.

I think there’s an opportunity for regulatory harmonization. We can see in Africa there are some sub regions who have already harmonized. Of course, if you take the sub region where there is, a monetary union, the likes of the West Africa Economic and Monetary Union or the Economic Community of Central Africa, for instance.

There have already been some harmonization within the different countries in that context, but more countries are in regional economic communities where there are not monetary unions. So we also need to facilitate the harmonization of the regulation and looking at how do we bridge the gap between different regional economic communities.

So for with that perspective, at AfricaNenda, we’re really looking at the research we’ve done in the SIIPS report, and particularly the one we did in 2023 highlighting the different challenges we see, regulatory challenges but also operational challenges as well. And we have built a partnership with the African Union in terms of advocacy for regulatory harmonization in Africa, and have made proposition to perhaps look at payment system directives as an alternative to engage into bringing more harmonization into regulation and also building on the lessons of what we’ve seen in Europe or in India, Asian regions in terms of cross-border payment and how that regulatory harmonization has unlocked opportunities for service providers to innovate and provide more cross-border payment solutions.

Joanna Wisniecka: Sabine, if I’m a policymaker listening to this, there’s a call to action that I’m hearing here. And you mentioned some bright stars, some movements, some efforts that have been successful at harmonization. What has contributed to that? What’s in the soup? What are the ingredients that are going to help, move this forward and towards addressing these barriers?

Sabine Mensah: That’s a great question. I think for me first is the realization of the opportunity. And the Africa Free Trade Continental Area offers that opportunity to enable more intra Africa trade, to enable more inclusive economic opportunities to Africans and businesses and individuals alike. And that is an opportunity when you look at it also from a cross-border payment, we look at over 54 billion dollars in influence from a remittance perspective, payment coming into Africa. These are opportunities.

So I think for the regulators to see the pathway, to take these opportunities, to take Africa’s potential and turn it into effective socioeconomic impact for our population and inclusive growth is a great incentive for that to happen. It also takes a coalition of the willing, and we do have the Association of African Central Banks, AACB, as a body within the continent. I think it would be a great body to engage with looking at how harmonization of payments regulation in Africa can help fast track more cross-border payments and can help realize the ambitions of the Africa Continental Free Trade Area.

It does take also the ability to bring the different ecosystem actors together. It does take convincing through advocacy and capacity building. And those are all where we at AfricaNenda aspire to really come together with the African Union and other stakeholders and also the likes of the Association of African Central Bank to really push this agenda as soon as possible because I think technology is no longer the barrier. On the contrary, technology has proven that this can work. So we need to really look at where regulation and policy bottlenecks are and how do we overcome this bottleneck through a regulatory and policy harmonization and bringing that at a continental level where heads of states can really embrace this payment service directive for Africa. Why not?

Joanna Wisniecka: I love that you started with highlighting that there is an opportunity here. Of course there is a, We want to do good and we want to bring more individuals into formal financial services. There’s a policy moral objective and there’s an opportunity. There’s a real business opportunity here. Some of the numbers that I’m hearing about the potential for cross-border payments in the African region are massive, potentially in the trillions of dollars in the next 10 years. And that’s a message I hope we can really get out there, that there’s a real opportunity here.

Sabine Mensah: I agree with you and I also think we don’t have to start from scratch. We’ve seen this journey. Europe, in a Single Euro Payment Area. We’ve seen that journey in terms of a regulatory harmonization with Payment Service Directive 1, 2, and currently 3, which enables these fintechs from one country to be able to provide services in another country, fast track their licensing.

We’ve also seen in the Asian countries coming in together. We are currently seeing a project with the Bank of International Settlement, the Project Nexus, which is looking at interconnecting the instant payment system of different countries to enable seamless cross-border payment in the ASEAN region.

So those are all opportunities that we can really look at, benchmark, find out the lessons, and see how that can be customize, can apply, or can at least provide with starting points that we really need to look at our context in Africa and see what we can create for payment service directive.

And I think this is where I am very, very passionate about because at AfricaNenda, a part of our role is to be able to provide these benchmarks, to do research, to bring this information forward so that regulator and policy makers can leverage what we know in the ecosystem, what we know from other regions to really drill down on our bottlenecks and our challenges in cross-border payments in Africa and what can be done.

And that journey, this is really a call to action for me, and it has to start now, not later. We want to realize the Africa Continental Free Trade agenda, and that starts with solving the payment problem. Because without payment, without payment, there is no trade.

Joanna Wisniecka: Let’s put a finer point on, you’ve brought up the SIIPS report now a few times. And you’ve published that for the last, AfricaNenda has published that for the last three years. As far as I know, it’s the only report of its kind that highlights Africa’s progress and implementing inclusive instant payment systems and as a go-to for anyone, including myself, interested in understanding and tracking progress of inclusive IPS. You also highlighted the 2024 report highlights that there were 28 domestic and three regional instant payment systems operating in Africa. And, to me, it was quite notable that the volume of transactions flowing through these systems has grown almost 40% annually over the past few years.

That’s significant. That’s progress. What has contributed to this success and what are your aspirations for Africa’s digital financial services and instant payments journey over the next few years? What is coming in the next SIIPS report? Can you give us a little preview?

Sabine Mensah: Oh, thank you very much for asking. When we started the SIIPS report in 2021, it really was out of necessity for ourselves. We were starting and we really needed to understand what’s going to be our strategy and the baseline where we’re starting from. So I’m really happy to hear from you that how useful the report is.

And before I can get to what’s behind the success, I think it’s important to identify for us how we evaluate the different instant payment system and the typology of these instant payment systems. So of course, if it’s an instant payment system that’s bank led, that’s the banking rail, we’ll call it a bank IPS. If it’s leveraging the mobile money rails, we’ll call it a mobile money IPS. And what we call cross domain IPS are instant payment system that enable interoperability, bank to wallet, to wallet to bank.

So for me, as a consumer, for me as an unbanked person. It is very difficult to convince me to have an account with different providers because my mother has one provider A, my sister has provider B, I’m with provider C, and yet I have to send money to both of them. So these cross domain instant payment systems that are enable interoperability, all to all, are bringing a value proposition that says that it does not matter which provider you’re doing business with. As long as you have an account, you can interact with the rest of the financial ecosystem through these instant payment system, particularly if they’re inclusive, instant payment system.

So when we started, we looked at the evolution and couple things have played into the success of the growth that we’re seeing right now. So before 2010, most of the instant payment system were bank-led, instant payment system. 2010, the landscape shifted because from 2010, you see more mobile money, instant payment system coming in. And then another shift happens around 2020 where you have this cross domain in instant payment system coming in and really taking the lead.

So the SIIPS 2024 report, we see that we have seven bank IPS. We have nine of the mobile money IPS, and then we have 14 of these cross domain IPS’s and one that is leveraging central bank digital currency rails, the eNaira in Nigeria. So the evolution and the growth that you’re seeing, particularly in those last, from 2020 till now is really driven by the adoption of more cross domain instant payment system, which is fueled of course by the adoption and the growth of mobile financial services and infrastructure that enable interoperability for more convenience for the consumer.

And when we looked at how this trajectory has been is that we stand at about over 49 billion transactions, processed in 2023 and about over 1 trillion US dollars for value. So there’s definitely a lot of transactions. There’s definitely adoption. And what the journey is telling us is that the more cross domain instant payment systems happening, the more interoperability in the ecosystem, the more value consumers sees, and the more adoption and usage we’re seeing into the ecosystem.

So I hope that answers your question.

Joanna Wisniecka: Yeah, it’s exciting. Exciting what we’ve seen, then excited to see the progress ahead.

Sabine Mensah: For us at AfricaNenda the journey ahead, we feel that we are on a tipping point really in Africa, in the instant payment journey. Particularly with the focus that we are driving for inclusivity in this instant payment system, we are looking at a future where every single country in Africa has access to an inclusive instant payment system because we believe this will be the catalyst to enable access to financial services for all Africans on the continent by 2030.

And that’s what drives us and our team of 21 people across 11 countries working with regulators, working with instant payment operators, working with digital financial service providers, and of course working with the development ecosystem in the country. And for me, this vision is a realistic one because we are already leading in terms of instant payment systems on the continent. And we already have some sub-regional instant payment system.

So it’s a matter of how fast we can enable inclusivity and how much we can drive interoperability across the ecosystem in Africa by making sure that at the end of the day we are focused on consumer. Accessibility, affordability, recourse for consumers, and a digital ecosystem that really delivers for consumers and also protects them.

Joanna Wisniecka: I hear that passion in your voice and your commitment to this work that started so many years ago where we started this conversation. I know we’ll be keeping a very close eye on developments and we’ll be on the lookout for the 2025 report.

Building on, on instant payment systems a little bit, the conversation that we had with Michael Wiegan at the Foundation also highlighted that digital public infrastructure or DPI is critical in breaking through existing financial inclusion barriers so we have an instant payment systems or component of that. Earlier in the conversation, you also mentioned data, and that’s a component of digital public infrastructure as well.

What will it take to deliver DPI necessary for sustained scalability of these systems? Where are we with DPI on the African continent?

Sabine Mensah: Well, here is something I can give you for the 2025 SIIPS.

Joanna Wisniecka: Ooh, preview. I like it.

Sabine Mensah: Digital public infrastructure will be one of the deep dives chapters in the reports. We’ll be able to provide more information on how that’s faring in Africa. But one of the things I can say is that when I look at the building blocks of digital public infrastructure, the digital identity, the digital payment, and the data sharing platforms, I feel that the digital payment building block is really the user of the other two blocks because with digital identity, you are enabled easier. Know your consumer, your customer, due diligence, EKYC, which the payment system will use to enable an instant payment transaction.

At the same time, also, data transfer, data exchange platform will enable a faster digitization agenda, leveraging these instant payment system rails to serve consumers, to serve businesses, to serve government for that matter. So it is important that at a country level, or regional for that matter, but a country level, that all the efforts in building digital public infrastructure be inclusive, bring all the different stakeholders at the table. What we’ve seen in the past, efforts starts sometimes with digital identity, and that’s led by a specific ministry involved in digital identity, which is great that there’s work happening in the digital identity building block. What’s missing sometimes is the link with the financial ecosystem to sit at the table to be able to voice what are some of the prerequisites needed to ensure that digital identity becomes an asset in the payment space for enabling KYC, EKYC and so forth.

So there’s an opportunity to ensure that when countries are working through the digital payment infrastructure roadmap, that they bring different stakeholders. Of course, there might be a leading agency with identity with payment, with data exchange. But bringing all the other stakeholders at the table when the design, when the vision is being built, enable a more inclusive digital public infrastructure to serve consumers, businesses, and government.

And with that in mind, I am also happy to share that we at AfricaNenda have worked with several other organizations, the like of DIAL, the Center for Digital Public Infrastructure, CDPI, and also the Better Than Cash Alliance, under the leadership of David Portier of Integral Solutions to put together a digital public infrastructure roadmap playbook, which will be coming out very soon, that will be an asset for countries that are starting their journey or that have already started their journey to leverage and really work towards an inclusive process of onboarding all this.

Relevant stakeholder needs to have a seat at the table for building their digital public infrastructure strategy and the building blocks that will later serve hopefully at the digital transformation that is inclusive. So that’s certainly something that we’re looking forward to seeing in the next, month or two.

And as for SIIPS 2025, we are definitely looking at launching it in November, and I’m happy to say that this will be in Eswatini and hopefully looking forward to having your participation, of course, the entire ecosystem. And my call to action will be to really look forward to this.

We are not only going to be looking at the evolution in the landscape, and I can also tell you the landscape has changed much more that we’ve seen the change in the last year. So a lot of exciting news for Africa, and again, that goal of instant inclusive payment system in rural countries by 2030 is within grasp for the ecosystem.

And it will take collaboration, it will take working together and really accelerating our impact to be able to reach this goal.

Joanna Wisniecka: Wow. Well, I am excited for all these additional publications that are coming our way. I know we’ve barely scratched the surface on DPI and so we’ll certainly be looking forward to digging into that content.

What are your recommendations, as a final question, as we begin to wrap up, what are your recommendations for our listeners who really want to stay abreast of instant payments developments and broader financial services, innovations and those private sector opportunities that we talked about in Africa?

What other sources can you point to for our listeners to pay attention to?

Sabine Mensah: Well, for one thing, Joanna, I do hope that they’re listening to Payments on Fire. I think you’re doing a great job of providing perspective and information on what’s happening in the ecosystem.

I would also like to call of them to really look up AfricaNenda on our website, but also follow us on LinkedIn and all of the resources that we are putting together this year. In addition to looking at inclusive instant payment system, we will be also looking at gender intentionality. What does that mean when you’re building instant payment infrastructure and what are some of the levers at the design stage of an instant payment system to be able to really ensure inclusive outcome, particularly for women in that ecosystem.

My call is really, it takes a village. I think we said that at the beginning. It takes a village. It takes intentionality in wanting to collaborate with other organizations to be able to bring that coalition of the willing together to have more impact. And that for me is one of the key where I’m hoping that we can bring public and private stakeholders together. We can bring development partners to work together on common agenda and building the digital public infrastructure that’s needed and countries in Africa for a digital transformation that leaves no one behind.

We are always looking for opportunities to collaborate with different stakeholders. So please take us on our words and let’s work together.

Joanna Wisniecka: Thank you so much, Sabine. I hope our listeners are as excited about following the progress, the work, the much work that needs to be done on the continent as I am. Sabine, thanks so much for spending the time with us on this episode. It’s been a pleasure to speak and to learn from you, and I’m so happy that while this is the end of the episode, that our collaboration will continue.

And to all of you listening, we hope this shines some light on what’s happening and why in payments aspects of financial inclusion. And please stay tuned for the next episode in this series where we look at the latest research and financial inclusion, including gender intentionality, important trends and innovations.

Thanks for joining us, and until next time, keep up the good work and bye for now.