Insights | Card & Mobile Money Interoperability Empowers Africa
Updated: May 2025
When I founded MFS Africa more than a decade ago, I set a simple measure of success for the business: to facilitate access for my mom's honey business in Porto-Novo, Benin, to collect payments from her customers from across the continent – and to make the process as easy as a phone call.
Why is Card and Mobile Money Interoperability Important for Africa's Future?
Africans want the same ease of purchase and payment as consumers anywhere else in the world. They want to order clothes and electronics and have them delivered promptly. Mobile money has expanded financial inclusion, but more is needed for seamless purchases outside their countries and the continent. Interoperability between mobile money and cards is crucial. It ensures merchants can accept payments from any consumer, whether they're using mobile money or a card, online or offline.
The Untapped Potential of African Retail
In a retail sector worth hundreds of billions of dollars, online retail accounts for just one percent of sales, against a global average of 15%. Interoperability can bring that ratio closer to global standards and grow the sector. The appetite is clearly there; the COVID-19 pandemic saw African eCommerce sales grow 42% between 2019 and 2020. Imagine the growth when people can buy and sell seamlessly, regardless of location or channel.
Card vs. Mobile Money: A Quick Comparison
| Feature | Mobile Money | Card Payments |
|---|---|---|
| Accessibility | High accessibility, especially for unbanked populations. | Requires a bank account, limiting accessibility. |
| International Usage | Limited international acceptance. | Wide international acceptance. |
| Security | PIN-based security for transactions. | EMV chip and PIN for secure transactions. |
| Fees | Transaction fees can vary. | Transaction fees depend on card type and merchant agreement. |
Why Card Interoperability is Crucial Alongside Mobile Money
The focus on interoperability shifts from the mobile money narrative, which has dominated discourse. Mobile money's growth has been explosive. According to GSMA’s 2022 State of the Industry Report on Mobile Money, African mobile money transactions grew 39% in 2021 to reach US$701.4 billion, accounting for 70% of the global total. Spotify, in partnership with dLocal, now accepts mobile money payments. By 2025, an estimated one million young people across Sub-Saharan Africa will have informal employment in the mobile sector, often as mobile money agents.
Much of mobile money’s growth is due to the fact that approximately 95 million Africans (around 57% of the continent) do not have a traditional bank account. However, cards remain the preferred payment method in many instances. We must shift the narrative towards facilitating interoperability between mobile money and cards, promoting adoption at scale.
Making Payments Truly Borderless
For the African fintech revolution to reach its true potential, interoperability cannot be confined to the continent. It must be borderless, allowing African consumers and businesses to make payments to any destination, online or offline. At MFS Africa, this means connecting mobile money to the rest of the world.
Card networks appear to be the best way to achieve this. In 2019, we partnered with Visa to connect our MFS Africa HUB to the Visa Network for card issuing at scale. The recent acquisition of US company GTP accelerates interoperability. The launch of the Mpesa Global card with Visa shows that international players recognize the need for interoperability. Soon, every mobile money user can have a card attached to their account. Mobile money must evolve, and interoperability is key.
What's the Best Way to Prepare Your Business for Card and Mobile Money Interoperability in Africa?
As you consider expanding your business in Africa, here are a few tips to keep in mind. Partner with payment providers who offer interoperable solutions. Understand local payment preferences and regulations. Educate your customers on the benefits of interoperable payment options. By adapting to these changes, you'll position your business to thrive in Africa's evolving financial landscape.
3 Key Benefits of Card and Mobile Money Interoperability
- Increased Financial Inclusion: More Africans gain access to digital payment options.
- Enhanced Cross-Border Trade: Seamless transactions boost trade within Africa and beyond.
- Economic Growth: Interoperability stimulates retail and e-commerce sectors.
What are the challenges to achieving full interoperability?
Achieving full interoperability requires addressing technical integration hurdles, regulatory complexities, and varying consumer adoption rates. Overcoming these challenges is crucial for unlocking the full potential of a unified payment ecosystem in Africa.
Myth: Mobile money will completely replace cards in Africa. Reality: Interoperability is key to empowering consumers with choice.
While mobile money has seen impressive growth, cards still hold significant value for international transactions and certain merchant preferences. Interoperability empowers consumers to choose the payment method that best suits their needs and context, fostering a more inclusive and efficient financial landscape.
