The rise of mobile money has transformed telecoms companies like MTN and Airtel into some of the continent’s most important financial transaction facilitators, or how Nigerian eCommerce behemoths Konga and Jumia are progressively defining Africa’s digital payment environment.
However, the announcement by Nigeria’s Guaranty Trust Holding Company (GTCO) that its FinTech subsidiary, HabariPay, had received final approval from the Central Bank of Nigeria (CBN) to begin operations marks the entry of one of the country’s leading African banks into the region’s increasingly crowded e-payment market.
“Payments are central to the development of financial services globally and represent a key growth area for the Group,” said GTCO Group CEO Segun Agbaje, adding that “our vision is an Africa where every payment is digital, and we hope to achieve this by increasingly leveraging technology to improve access to financial devices for individuals and empower business,” he added.
GTCO has also unveiled Squad, an all-purpose solution that brings together several technologies such as a payment gateway, eCommerce platform, and point-of-sale app under a single roof, hinting at the adoption of a super app model that has become increasingly popular in emerging markets across Africa, to coincide with HabariPay’s launch.
HabariPay will compete with similar services from ecommerce giants Jumia and Konga, as well as popular products from Nigerian FinTechs Flutterwave and Paystack, by entering the super app ring.
With low smartphone penetration across Africa, more financial services providers have entered the market, while mobile money platforms such as Airtel’s Money Wallet have expanded their products beyond USSD-based transactions.
Squad’s transparent, easy-to-use price structure makes it a great candidate to syphon currency flows from popular mobile money networks, given the growing desire for affordable, easy-to-use digital payment options throughout African markets.
Squad will need to interact with Africa’s current payment ecosystem, which includes other super applications and non-Nigerian banks, if GTCO is serious about giving a viable alternative to mobile money transactions and seeing broad use of HabariPay outside of Nigeria.
Furthermore, as Vimal Kumar Ambat, CEO of Airtel Mobile Commerce, told PYMNTS, USSD-based mobile money transactions aren’t going away anytime soon, especially with new eCommerce options that allow users of mobile money wallets to make online purchases.
Finally, GTCO’s foray into e-payment services through HabiriPay and Squad indicates the company’s recognition of the sector’s enormous development potential on the continent.
On the one hand, as more individuals consider mobile payments as a viable alternative to cash for everyday transactions, increased data coverage and smartphone usage will fuel a rise in mobile payments.
As African economies develop and consumer buying power grows, demand for eCommerce and digital services that require user-focused digital payment solutions will inevitably rise, with super app models like Squad’s playing a key role in the emerging African payment paradigm.