In the last 12 months, there has been a radical shift in the payments behavior of African consumers. The McKinsey Financial Insights Pulse Survey conducted in October 2020 found that most consumers expect to increase their use of digital and mobile banking services after the crisis.
Prepaid represents one of the fastest-growing segments of the African payments industry. The flexibility and the dynamic nature of the platform is a core driver. From serving primarily as a cost-efficient tool for financial inclusion, prepaid, today, is a vital platform for Fintech innovation and is widely acknowledged as a key enabler for secure and flexible payment solutions. Prepaid cards are also widely accepted and work with new form factors such as mobile apps and digital wallets.
Financial institutions need to tap into this growing market with innovative capabilities. FinTechs and challenger banks are bringing innovative solutions including cross-border transfers and bill payments to the market, while online retailers have adopted prepaid accounts for consumers to make payments via mobile apps to address market needs.
With the acceleration of digitalization initiatives in recent months, these opportunities will multiply.