South Africa


  • Service: Advisory, Risk & Compliance
  • Type: Press release
  • Date: 2014/06/02

Payment revolution on the horizon 

The African technology market has emerged on the back of the continent’s mobile networks and is unlocking economic potential on the African continent in some of the most unconventional ways. KPMG conducted primary research and found that sub-Saharan Africa is the fastest-growing mobile market in the world, growing at 44 percent per annum, and demand is projected to continue growing at close to this rate. [1]

In the period between 2000 and 2012, the African mobile market grew 40 times, reaching 650 million subscribers [2] .  Smartphone penetration in Africa is around 17 to 19 percent; while some countries such as Kenya and Nigeria have a penetration rate of more than 40 percent. [3]


This has placed Kenya in the position to develop and implement one of the most innovative and far reaching solutions to Africa’s problems around banking infrastructure and payments.


Before 2007, Kenya had many of its people in the unbanked space, much like South Africa. What they didn’t have was a well-developed banking infrastructure. The Kenyan government, because it has identified technology as a key driver of economic growth, invested in M-Pesa, a mobile payment solution which is enabled by the existence of mobile connectivity. They found that as long as people had mobile phones they could transact without the need for physical currency. This has given the Kenyan economy a boost as many more people are now able to transact and participate meaningfully in the economy.


The next innovation in payments globally will be Near Field Communication (NFC). Many mobile devices around the world are already equipped with the NFC chip which is unique to the phone and SIM card. With this technology and the M-Pesa platform, users will be able to scan their mobile phones across a reader which is loaded with the user’s details, and with simple PIN verification, the user will complete the transaction without the need for credit or debit cards. 


NFC could enable the use of a mobile wallet which would reduce the need for consumers to carry cash. This would be particularly relevant in high volume, small value transactions such as the taxi industry, used by more than 15-million South Africans every day [4] . Passengers would merely scan a mobile phone across an NFC reader, enter their PINs and payment would be effected. This has the potential to reduce issues around the handling of cash for both customers and taxi drivers. The drawback is that the infrastructure required to enable these types of transactions is yet to be developed but, of course, this can be mitigated by direct phone to phone transfers enabled by NFC.



[1] GSMA, July 2013
[2] World Bank, December 2012
[3] Samsung, April 2013



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Frank Rizzo
Technology sector leader at KPMG in South Africa