Mobile Wallets, Cryptocurrency, And CBDC Threatens Cash Supremacy In Nigeria
The adoption of central bank digital currencies (CBDCs), the rise of mobile wallets, and the changing payment trends have all been cited as major threats to the dominance of cash in African business transactions.
According to a report by Cellulant, various innovative trends that are now in development are challenging the dominance of cash and are expected to have an impact on how consumers and businesses process payments globally, including in Africa.
“Currently, this system is going through radical changes that are transforming how individuals and businesses send and receive money.”
“Furthermore, several exciting trends are emerging that will shape the way businesses and consumers process payments worldwide. From cryptocurrency and contactless transactions to artificial intelligence, these innovations are set to transform the industry as we know it,” the report stated.
The company predicted a $612.04 billion increase in the worldwide payments market, with a compound annual growth rate (CAGR) of 8.9%.
The market is anticipated to reach $847.59 billion by 2027, growing at a CAGR of roughly 8.5%, as more consumers adopt alternative payment systems as the sector becomes more secure, reliable, and quick.
“There is an increased focus on security and data privacy regarding payment processing. For instance, financial institutions are implementing more robust authentication processes to protect against fraud as well as introducing new technologies such as biometrics and blockchain to strengthen security,” the report noted.
It stated that Africa is at the forefront of the development of smart payments and named M-Pesa in Kenya, MTN Mobile Money in Ghana, and Tingg as some of the gateways that are sharpening the ways money is transferred and received around the continent.
Added among others was: “What’s more, new technologies and trends in global payment processing are reshaping the continent, making it easier for businesses to trade with each other and with the rest of the world. One of the most significant changes is the growth of mobile money. Equally important, more and more people in Africa are using their phones to send and receive payments.”
Insisting that the elimination of middlemen in the supply chain has boosted the speed and cost effectiveness of adopting blockchain for payment settlement, it identified blockchain technology as a key trend transforming the African payments market. It anticipated that the new technology might potentially revolutionize.
African economies, allow consumers to “move money around without losing value through exchange rates or fees. These trends are just some ways that global payment processing is changing Africa. They are making it easier for businesses to trade with each other and connect with the rest of the world.”
The paper claimed that although the death of money, as long anticipated by some experts, has not occurred, more businesses and people are shifting away from cash transactions.