Widespread adoption and use of digital payments and financial services could increase the gross domestic product of all emerging markets by six percent or a total of $3.7 trillion by 2025, according to projections by the McKinsey Global Institute. That could in turn create up to 95 million new jobs across all sectors of the economy, raise overall productivity and investment levels. Digital financial services already play a huge role in the bid for financial inclusion and inclusive economic growth in Africa but much remains to be done and the pace of digital financial inclusion varies in different countries across the continent.
Mastercard has thus partnered with Samsung, Airtel Africa, and Asante Financial Services Group (“Asante”) to launch a Pay-on-Demand payments platform and drive the digital economy across Africa. By enabling digital access to everyday products and services for under-served consumers and micro, small and medium enterprises (MSMEs), the payments platform will aim at driving digital and financial inclusion and can lead to improved economic possibilities for people and businesses. The platform, built by Mastercard Labs, aims to bring convenient financing opportunities to consumers, entrepreneurs, and merchants across Africa, helping to combat the socio-economic problems they face from restricted access to financing.
The company’s strategy is based on collaboration and partnerships that drive innovation and this is another example. Through Samsung’s pay-on-demand mobile devices and Asante’s insight as a leading provider of digital financial services, the Mastercard innovative platform provides effective handset loans for consumers. Telecommunications and mobile money services provider, Airtel Africa will coordinate the delivery of the product.
The Samsung devices are embedded with the Samsung Knox platform, which provides a secure environment for corporate data and apps protecting both business and personal privacy from boot-up, runtime, and even when powered off.
This partnership will help to deliver convenient asset financing to consumers and MSMEs through the convenience of their smart handsets at a low upfront cost while distributing payments over time. As the product is used, importantly, the individual or business will establish a digital transaction history, which can be leveraged for making other financing solutions accessible, such as credit, savings, investments, and insurance.
For small business owners and entrepreneurs, this is particularly beneficial as it offers the opportunity to obtain financing to drive their business forward as well as build digital capabilities for their everyday business. It is envisaged that Pay-on-Demand users will also be able to access digital payments through Mastercard’s virtual card and Mastercard Quick Response (QR Codes) functionality on their Airtel mobile money app enabling them to make digital transactions across the face to face and online merchants.
“At Mastercard, we are committed to accelerating the growth of digital financial services in Africa. As market organizers, we are always partnering with like-minded organizations to advance financial inclusion for individuals and MSMEs by empowering them with the right digital solutions. This Pay-on-Demand platform enables us to deliver on that promise, giving consumers an opportunity to participate in digital commerce while fostering digital and financial inclusion across the country,” said Amnah Ajmal, Executive Vice President of Market Development, Mastercard MEA.
There are 14 markets being considered across Africa, piloting first in Uganda in October, subject to regulatory approvals. The other markets include Tanzania, Rwanda, Kenya, Nigeria, DRC, Gabon, Malawi, Zambia, Madagascar, Seychelles, Chad, Niger, and Congo Brazzaville. This partnership builds on the broader digital transformation partnership between Mastercard and Airtel Africa across sub-Saharan Africa and on the global partnership with Samsung to provide Pay-on-Demand mobile devices.
“Samsung is proud to be the provider of world-class devices with an end-to-end security platform with always-on protection,” CEO and President of Samsung Africa Sung Yoon said. “This partnership will benefit the people across Africa starting with Uganda and will create affordable payment plans to access Samsung devices. There is so much growth opportunity in the region and we believe that this partnership will help accelerate economic growth in the mobile industry.”
Chief Executive of Airtel Africa, Raghunath Mandava, stated: “Our mobile money services are changing customers’ lives across Africa. This innovative partnership will help Airtel feature phone customers upgrade to smartphones and pay with Airtel Money on flexible installment plans. This opens up the digital economy and creates additional opportunities for Africa’s entrepreneurs.”
“Our purpose in Asante Financial Services Group is to advance financial independence and improve the well-being of Africans and African businesses. This bold Africa-wide initiative, starting with Uganda, is aimed at facilitating convenient ownership of smart devices for underserved segments and will catalyse a future for Africa that is built on shared prosperity,” Asante CEO Chidi Okpala added.