Africa is emerging as the focal point of remarkable expansion, and is anticipated to evolve into the fastest-growing fintech market from 2023 to 2030.
Recent findings from the 21st annual Global Payments Report by Boston Consulting Group (BCG) indicate that global payments revenues experienced a remarkable annual growth rate of 8.3% from 2017 to 2022, ultimately reaching an astonishing $1.6 trillion by the conclusion of 2022.
GLOBAL PAYMENTS REPORT | 2023
Payments-focused fintechs now number more than 5,000 globally and account for about $100 billion of total industry revenues. By 2030, they could command a revenue pool worth $520 billion, intensifying competitive pressure on incumbents.
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South Africa, a prominent player in the African fintech sector, held a significant position by contributing $10.3 billion to the global revenue pool, with an annual growth rate of 6% since 2017. Forecasts predict that South Africa’s payment sector will experience substantial growth, reaching $22 billion by 2032, mirroring the nation’s strong growth trajectory.
On a global scale, the report foresees a reduction in revenue growth to 6.2% annually up to 2027, with the revenue pool expected to reach $2.2 trillion by that time. This slowdown is attributed to a shift in the retail payments landscape, moving from card-based transactions to account-to-account transfers, and is further influenced by diminished card margins in certain markets.
Nonetheless, Africa, driven by its distinctive operating conditions and abundant opportunities, is anticipated to maintain double-digit growth rates.
A noteworthy highlight from the report is the remarkable surge of payments-focused fintech companies. Currently, there are over 5,000 of these fintech firms operating globally, collectively contributing around $100 billion to the industry’s revenues.
By 2030, these payments-focused fintech companies could amass an impressive revenue pool of $520 billion, increasing competitive pressure on established industry players.
In Africa, where the fintech ecosystem is rapidly growing, the six leading fintech hubs together host a total of 681 companies. The continent is well-positioned to outpace the rest of the world, with revenues expected to increase at a rate 13 times faster than the global average.
“The impact and scale of disruption in Africa are amplified compared to mature economies. Even though the trends differ for each country, the continent sees more growth in payments, a high degree of disruption, and increased speed of transition,” remarked Tijsbert Creemers, managing director and senior partner of Boston Consulting Group (BCG) South Africa.
“Africa is indeed the place to be for global payments. We have seen the advanced speed at which regulators, banks, and fintechs have worked to enable new payment solutions. These solutions not only enable opportunities for the private sector but also play a crucial role in the continent’s economic development.”
The ascendancy of digital currencies is another noteworthy trend with over 90% of central banks worldwide actively exploring digital currencies as a supplementary form of cash. This transition from theoretical consideration to actual implementation could result in the operational use of retail and wholesale central bank digital currencies in certain countries over the next decade.
To access the full Global Payments Report, click here.
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