Role Of Payment Gateways In Financial Inclusion In Africa

Role Of Payment Gateways In Financial Inclusion In Africa

Payment gateways can help close the gap by allowing people and businesses in Africa to access financial services digitally. It should be noted that A significant portion of the continent’s population is still unbanked or underbanked. As such, payment gateways are pivotal to financial inclusion in Africa, which is the availability and accessibility of financial services and products at a reasonable cost for all segments of society.

Ways Payment Gateways Are Promoting Financial Inclusion In Africa

1. Enabled Digital Payments

Digital payments have become more prevalent in Africa, with several digital transactions increasing tremendously. For individuals seeking to enhance their financial accessibility and simplify bill payment, money transfers, and online purchases, this is fantastic news.

The creation of payment gateways that enable digital payments is primarily due to the growth of digital payments in Africa. Payment gateways allow users to use their desktop or mobile devices to make payments online, even if they don’t have a credit card or bank account. Therefore, digital payments are not only for those who use banks or cards but also those who want to access financial services without using traditional banking channels.

2. Access To Financial Services

Access is crucial when it comes to financial services in today’s world. You might not be able to obtain the loans you require or make the purchases you wish to make without it. However, what does “access” actually mean? It implies comparing prices and finding various products and services to suit your needs. This means you can invest your money and earn interest on it by opening a savings account with a business. It also implies that should the need arise, you can apply for credit or obtain a loan.

All this has been made possible by payment gateways –various financial services, such as credit, insurance, and investment products, are now accessible to individuals. It is feasible for Africans now to leverage the benefits of the formal financial system and participate in it.

3. Payment Simplification

Payment gateways became more popular during the lockdown that resulted from the pandemic, causing many businesses to close in Africa, dealing a heavy blow for companies that exclusively operated on cash transactions. But, adopting payment gateways would have salvaged the situation for businesses such that irrespective of cash or card, they will continue to receive payment from their customers.

Therefore, local businesses can use payment gateways to receive payment anywhere in Africa without restrictions.

4. Lower Transaction Costs

Financial services are now more affordable and available to individuals of all income levels thanks to the payment gateway’s assistance in reducing the associated transaction costs. This is the narrative in Africa, where a large number of people still struggle to obtain bank account access. Those who use the gateway can send money to friends and family or shop online without worrying about high fees or other problems that could impede their ability to make online payments. Lower-income people can now engage in the digital economy and easily benefit from all its benefits.

Conclusion

Payment gateways have been instrumental in advancing financial inclusion in Africa by providing digital access to financial services for individuals and businesses, which will be more essential as the continent transitions to a cashless economy to guarantee everyone has access to the financial services they require.

Online fraud has increased along with digitization because it is now easier to trick others by using stolen data or false identities. Payment gateways, which provide extra security measures for users who desire extra protection when making online payments, have assisted in reducing this risk.