Africa’s e-commerce boom offers golden opportunities for global merchants
June 5, 2024280 views0 comments
Onome Amuge
The African continent is on the brink of a transformative shift in e-commerce, with almost 50 percent of Africans projected to be buying goods and services online by 2025, a significant increase from the 13 percent recorded in 2017. Africa’s young and technology-savvy demographic, coupled with a meteoric rise in mobile connectivity, is expected to fuel this revolutionary change,as about 70 percent of sub-Saharan Africans are seen to be younger than 30, armed with a passion for innovation and digital connectivity.
This potential is evidenced in the findings of “Payments and E-Commerce in Africa,” a comprehensive report published by Nikulipe, a global fintech firm with a keen focus on local payment solutions in fast-growing and emerging markets.
In its report, Nikulipe highlights the unprecedented opportunity presented by the ongoing digital transformation in Africa for payment service providers and global merchants to tap into the continent’s burgeoning markets.
Yet, while these emerging markets offer a wealth of untapped potential, the report warns that any company seeking to establish a foothold must tread carefully, navigating the unique payment preferences of each individual country.
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The significant impact of mobile money on Africa’s economy is a central finding of Nikulipe’s report. As mobile adoption rates soar across the continent, mobile money has emerged as a potent financial instrument, particularly for the underbanked population.
This transformative role of mobile money is further highlighted by the fact that many Africans, who were previously excluded from traditional banking services, now rely on mobile money for transactions and other financial activities.
The report underscores the critical importance of embracing mobile money as a vital payment solution in Africa’s fast-growing and emerging markets, where it has the potential to accelerate financial inclusion and drive economic growth.
Speaking on the transformative potential of mobile money in sub-Saharan Africa, Nikulipe’s co-founder and CEO, Frank Breuss, noted that mobile money has emerged as a powerful catalyst for financial inclusion, especially in a region where traditional banking services have failed to reach a significant portion of the population.
According to Breuss, the region’s unbanked population, estimated at less than 10 percent credit card ownership and 33 percent bank account ownership, represents a significant challenge that mobile money has helped to address.
“By the end of 2022, Tanzania alone reported that 77% of its population over 15 years old were mobile money users, a testament to the deep integration of mobile financial services in daily commerce. Understanding the mobile-centric habits of African consumers will be key to successfully entering this growing market,” Breuss remarked.
Breuss underscored Africa’s massive market potential, estimating that more than 1.4 billion potential new customers could be tapped into by international merchants across both digital and physical goods sectors.
However, he acknowledged the importance of developing a comprehensive understanding of regional preferences and payment methods, noting that this customized approach to addressing local needs and offering a diverse range of payment options is essential for the success of international merchants entering Africa’s emerging markets.
Renowned as a trailblazer in facilitating access to Africa’s emerging markets, Nikulipe has carved a niche for itself in providing end-to-end support for global merchants looking to enter the region.
At the heart of Nikulipe’s success lies its commitment to equipping international merchants with the necessary expertise and tools to navigate the unique payment landscape of Africa’s diverse markets, thereby overcoming the numerous barriers that have traditionally inhibited their entry.
Breuss explained, “Our one-contract and one-API offer allows Payment Service Providers and Global Merchants to easily connect with multiple African markets by offering access to Africa’s most relevant Local Payment Methods.
“We combine the security of a European Financial license with the expertise of being locally present in Africa. We also cover the full transaction value chain, from payment processing to local fund collection, currency conversion, and remittance of funds back to our client’s bank accounts outside Africa.”
Nikulipe has adopted a streamlined and efficient approach that allows international merchants to seamlessly integrate into Africa’s emerging markets, focusing on rapid growth and customer expansion.
Through its comprehensive suite of solutions, Nikulipe aims to eliminate the complexities and time-consuming processes often associated with market entry, allowing businesses to capitalise on the region’s tremendous growth opportunities without compromising on agility and scalability.