Financial inclusion has driven the advancements in payment infrastructure, ensuring that more people use bank accounting platforms and that real-time payments are available as a viable alternative to cash.
Another key driver is innovation in response to technological advances like mobile phones and internet penetration in Africa.
The traditional payment infrastructure is now difficult to use; with the explosive growth of digital payment services providing convenience, there has been the need for more payment systems. These new systems have reduced the use of cash for transactions and migration from paper-based transactions to the growth of digital transactions for real-time payment, which is good for the economy. In Africa, this has led to the massive increase of micro-merchants-small time businesses and individuals who have been able to operate digital financial services due to this innovation.
After initial resistance, Central Banks (governments) have started partnering with these fintech companies. These governing banks play the role of setting direction and consistency, thinking about how these fintechs set up the infrastructure in terms of access, design consideration, safety and security, and the importance of making sure the institutions (fintechs) are aware of those things.
As regulators, the Central Banks pay attention to how they can make everyone access this service as easy as possible and how to make people use it. They also monitor the need for innovations, products and services-does it increase customer experience or reduce cost? What is it replacing? Could it replace cheques and the use of cash? Etc.
Most countries in Africa have developed new licensing regimes for fintech companies, including payment infrastructure providers. In Nigeria, the Central Bank of Nigeria (CBN) initiated the Payment Service Solution Provider (PSSP) for companies that make up the e-payment infrastructure.
While governing bodies regulate, fintechs are competitively building the tech, dealing with customers and driving innovation, including payment infrastructure.