Harnessing the potential of mobile payments in Africa

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By Dalene Deale, Strategic Consultant at Halo Dot

Financial inclusion remains a critical barrier across Africa. A considerable segment of the population remains alienated from basic banking services. Yet, the arrival of mobile payment technologies, like Halo Dot, promises to bridge this gap.

Halo Dot’s innovative approach turns mobile devices into secure, encrypted payment terminals, allowing for instant card payments without the need for a traditional point-of-sale device. This technology enables businesses to swiftly adapt to market demands, focusing on expansion and customer service rather than the logistics of payment processing.

Informal traders, a significant economic force in Africa, are set to gain from such mobile solutions. The shift to digital payments not only streamlines their operations but also facilitates financial visibility, enabling these traders to establish credit histories and participate more fully in the formal economy.

Going mobile

Take the M-Pesa mobile phone-based money transfer service that was launched in 2007 as an example. Now available in seven countries in Africa, it has more than 50 million active monthly customers.

Its impact in Kenya has been especially significant. A study found that access to M-Pesa increased per capita consumption levels and lifted 194,000 households (approximately 2 % of Kenyan households), out of poverty. The success of M-Pesa in Kenya and the rest of Africa shows how mobile payments can empower informal traders with the means to improve their financial stability while still growing their businesses.

Driving financial inclusivity

At a time when 45% of Africans still do not have a bank account, the user-friendliness and innovation of mobile payment technologies, such as Halo Dot, become a game-changer for financial empowerment.

Halo Dot converts mobile devices into secure, encrypted PoS systems, cutting through the need for conventional payment infrastructure. This is significant for the sizeable informal trader market in Africa that contributes significantly to countries’ GDP. It provides a convenient payment mechanism as well as a digital trail of their business transactions. By transitioning from cash to digital payments, these traders can demonstrate verifiable income, building a financial footprint that lays the foundation for a credit history.

Enabling businesses to accept card payments without the need to purchase or rent a POS device increases the merchants’ ability to accept payments sooner.

Establishing trust

Of course, people must trust mobile payment solutions if they are to be successful. One of the ways providers can help build this trust is to ensure their systems implement comprehensive security measures.

In the case of Halo Dot, the organisation has implemented extensive fraud prevention and security mechanisms that comply with global standards such as PCI MPoC (Mobile Payments on Commercial off-the-shelf devices). Halo Dot can also easily integrate into existing financial infrastructure to benefit from investments already made.

Fundamentally, mobile payment solutions like Halo Dot will help bring further economic growth in Africa and build trust in digital commerce solutions.