Interview with Kinda Chebib, Euromonitor, on payment technological advancements in APAC and Africa

With regard to the APAC and African market, what impact has the technological advancement over the payments industry? Are there any particularities in these regions?

While developed markets have seen cashless innovation and adoption occur at a relative gradual pace, many are being “leapfrogged” by regions such as Africa and Asia Pacific. These significant gains are largely attributed to regulators promoting e-payments as a means to fight tax evasion and corruption. Regulators in Africa are, for example, reducing interchange rates and improving merchant discount rates to encourage adoption.

Also, in the context of armed forces, corruption, poverty, and local population’s distrust in their government, informal solutions such as blockchain and cryptocurrency technology have emerged as tools with strong potential. Blockchain decentralises the payment system, in other words local consumer can make transactions by bypassing any central authority or the government. This has opened the door in particular to South African companies, which can now use blockchain to drive business value by preventing frauds risks and reducing transaction costs.

Similarly, the adoption of innovative cashless payments on a wider scale in APAC can accelerate economic growth by eliminating negative externalities such as tax evasion, enabling more resources to be channelled to financial inclusion initiatives.

What new opportunities will the competition between banks, card companies, and tech giants bring in these regions?

Africa has made tremendous progress in terms of technological advancement in payment. Innovation investors from across the globe are very keen on tapping into the potential offered by the continent and offer technologies that help in generating revenues and providing consumers a convenient payment experience. In Asia, large rural areas and unbanked population have opened strong potential for card and electronic payment companies, particularly mobile wallet providers. While banks in Africa are now racing to partner with major digital wallet providers, some other banks in APAC seek to partner with fintechs in their quest for digital dominance. Tech giants such as Google, Apple, and Samsung, as naturally, are all competing to get their piece of the pie as well.

APAC had the highest rate of online retail value globally in 2018. More than a third of total retailing in China is expected to come from online sources by 2022, a full 10% increase from 2018. The rapid conversion of retail in the market has directly contributed to broader adoption of financial services as well as card payment adoption. The largest online marketplaces and merchants have been in a unique position to drive the transition to cash alternatives. With many of the traditional retail banks not possessing a digital payment platform and being limited to offering financial products to all income segments, alternatives were required to enable digital commerce. Similarly to online marketplaces, telecommunication companies have effectively been able to leverage their existing relationships with consumers to expand to payments and financial products. In many markets, this has led mainstream financial institutions to expand their product offering and increase access to more consumers.

Are there any recent regulations or government initiatives influencing financial inclusion in Africa? 

One recent interesting initiative is the Equity Bank Congo and FSD Africa - a financial sector development program funded by the UK government – teaming up to implement an agency banking project to target unbanked in rural areas. Thanks to the initiative, farmers, young people, women, and small businesses in the DRC gain improved access to financial services. The three-year project will train and enrol a large number of bank agents across 22 provinces of the country, who will then help the unbanked sign up for financial products such as micro-insurance products, savings accounts, and credit.

Such initiatives can really help financial inclusion of DRC, which stands quite low as a result of poor infrastructure, prolonged civil war, and large geography. It is estimated that only 14% of people have an account at a financial institution as of 2018 and this project is expected to strongly increase access to finance for underserved customers in the country.

You will be a speaker at European Payment Summit 2019. What topics do you plan to tackle while being there and what panels are you most interested in?

The speaking session will be on Payments Digitalisation: Shifting Market Frontiers in Asia Pacific & Africa. It will touch on the topics of payment transformation, demographic and shifting retail’s impact on payments in those two regions. There will be focus on the rise of digital and proximity payment – with the growing importance of mobile wallet, AI, and blockchain.

I am interested in attending Keynote Panel Debate with Q&A The Brave New Payments World - A Regulatory Challenge and Keynote Speech Bridging the Continents: What Europe Can Learn from South-East Asia.

European Payment Summit 2019 (25-26 April, The Hague) offers a unique 2-day dual program featuring key developments in the payments/transaction space combined with key sessions on Open Banking, the latest developments in the regulatory landscape and advances in technology. Next to plenary introductions, delegates can create a meaningful 2-day program in order to gain best insights on developments, debate on key issues and learn best practice initiatives.

About Kinda Chebib

Kinda Chebib works as Consultant for Euromonitor in London, providing strategic intelligence for EMEA markets. In her current post, Kinda is responsible for key data building and insights in technology, finance, and services. She conducts research and make strategic recommendations to tech and financial services corporations in the domains of digital transformation, fintech, ecommerce, e-wallet and technology disruption. 

About Euromonitor International

Euromonitor International is the world’s leading independent provider of global business intelligence and strategic market research. We create data and analysis on thousands of products and services around the world. Euromonitor International’s global market research database, Passport, provides statistics, analysis, reports, surveys, and breaking news on industries, countries, and consumers worldwide.