How mobile payment is boosting trade across Africa

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However you look at it, mobile is a powerful, disruptive force. It is also a game changer in more ways than one. One field in which it is making a big difference is in the market places. All across Lagos and in other towns across Nigeria (include other African countries), payment via mobile technology has made it possible for people to buy and sell more conveniently. A simple definition of mobile payment is that it is money transfer performed from or on a mobile device.

John’s Chance Happening

Take the example of John who once went shopping at “Computer Village” in Ikeja, Lagos, in south west Nigeria. it is the largest computer/mobile market on the African continent. It is a constantly buzzing maze of streets and shops and stalls with an unending stream of human and vehicular traffic. On that day, John had exhausted the cash on him but had two more items on his list to purchase. The nearest ATM point was minutes away and would likely have a queue. In addition, he was already exhausted and was not keen on making the effort to get cash.

mobile payment
Image source: Know Your Payments

At the next store he stopped to ask for an item, he asked if a POS was available. The shop keeper replied in the negative. Almost sure that the shop keeper would be unenthusiastic about it, John cautiously offered to pay by transferring the cash to the shop keeper’s account. He had his bank’s mobile app on his phone and could easily do that. He was very surprised when the shop keeper agreed and proceeded to reel out his bank details.

The transaction was concluded in a short while and John went his way happy. It was his first experience with mobile payment in a market.

His final purchase at Computer Village that day was also by the same method. There was no POS, so he couldn’t pay with his bank card. Another quick transfer via mobile banking saved the day. John has since become a believer and has embraced using the method as often as his situation warrants it.

Traders Are Comfortable With Mobile Payment

Speaking with John, he says that his greatest surprise was how enthusiastic sellers were to receive payments in their bank accounts via mobile transfer. In some cases, those sellers wouldn’t even check their phones for credit alerts after he showed them the transaction success message on his phone. They seemed very comfortable with the method.

I asked John what would have happened if perhaps internet access was a problem at a location where he needed to make a payment via mobile. He replied that he could use good old USSD codes to still make the transfer. Ah. Interesting.

A number of other people that I asked about this confirm that the practice is fairly common. Traders and artisans now accept cash transfers to their account for services and goods. In the case of artisans, it offers the convenience of cutting down the number of trips they have to make. For example, the need to dash around to collect cash from their clients before heading to the market to buy items for jobs. For traders, cash sent directly to their bank accounts means less risk of losing money to robbers.

Whether it is from the perspective of the buyer or the seller, mobile payment makes sense in many ways. The informal market sector across emerging markets is benefiting greatly from it. Do you have a mobile payment story? Do share with us using the comment submission form below.


  1. This is a very good one.

    John has since become a believer and has embraced using the method as often as his situation warrants it.

    I am a true believer myself.

    Supermarket, mechanic’s, wherever. No need for carrying lots of money again, generally.

    But I still don’t get why we still have long queues at ATM points and banking halls.. My Bank is horrible with that.

    Mobile payments are certainly to be encouraged.

  2. As much as i would agree with you for most part of this article, I would, of course not agree with the acceptance of Mobile transfers by Businesses in Nigeria.

    The fact is, Mobile transfer is on the rise, however, it does face some challenges which you didn’t highlight. The Article doesn’t cover the antics some traders have against mobile payment. Of course, Mobile payment is the next big thing in Africa, but it’s not all good and rosy. We need time, time to accept cashless transfers.

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