Booming mobile payment spurs stronger China-Africa cooperation
China’s tech giants drive revolution in Africa’s mobile payment service
Published: Nov 18, 2021 07:13 PM
Photo: VCG

Photo: VCG

"OPay is making life easy," an African internet user commented on Twitter, referring to one Chinese backed digital payment service that has sprouted on the continent in recent years as a booming digital economy in China offers more opportunities for cooperation between China and Africa.

A digital revolution is taking place in Africa since the outbreak of COVID-19. According to the data of the Global System for Mobile Communications, by the end of 2020, there were more than 160 million monthly active accounts for mobile payment in Africa, an increase of 18 percent over the previous year.

Booming market 

Nigeria, in west Africa has 187 million mobile phone users out of a population of more than 200 million and across local mobile payment applications, there is a clear influence from Chinese technology. 

One of the biggest is PalmPay, a mobile payment platform invested by Chinese tech giant NetEase Games and Chinese mobile phones manufacturer Transsion Holdings.

Officially launched in Nigeria in 2020, PalmPay has become one of the fastest-growing mobile payment application products in Africa, with a monthly transaction volume of more than $100 million. Since the beginning of 2021, the app has ranked first in the number of downloads among mobile payment applications in Africa, the People's Daily reported.

"How to promote mobile payment services, improve the service level of financial business, and how to drive employment and improve people's livelihood are our key directions," said Wang Xiaojun, co-founder of PalmPay in an interview with the People's Daily.

By downloading the app, individual users can transfer the money, charge their mobile phone and pay for water, electricity, coal and cable TV without transferring fees.

"PalmPay is really a nice app. They give you discounts on Airtime, data bundles can also be used to purchase movie tickets and the app is fast and convenient," Bartholomew Nathan, an African user of the service commented on his Twitter account.

The COVID-19 pandemic has hit Africa hard and lockdowns have led to digital payments and e-commerce becoming the new norm for scores of households, playing a crucial role in scaling up economic recovery on the continent.

South Africa's leading online payment gateway PayFast reported its mobile payments had surged 143 percent year-on-year between March 2020 and February 2021, as digital payments are convenient and safe for people when they are shopping in person or online.

OPay, a Nigerian fintech startup which attracted investment from Beijing Kunlun Technology, also reported a steady monthly growth of 10 percent of mobile payment during the pandemic.

According to Qiu Zhien, CEO of OPay Nigeria, OPay now has 7 million registered app users across the country, with monthly gross transactions exceeding $3 billion, Xinhua News Agency reported on October 18.

"The African continent is one of the regions with the fastest rate of population and economic growth in the world. However in terms of internet financial services it is still a blue ocean market," he said.  

Unlimited potential

Africa presents a significant market for Chinese mobiles payment companies, Xiang Ligang, Director-General of the Beijing-based Information Consumption Alliance, told the Global Time on Thursday.

"Compared with the US and European market the African people have a high level of acceptance for these services due to their relative weaker credit card and banking system," Xiang said.

He noted that the experience and technology Chinese companies gained in the increasing intense domestic market would give them upper hand against other competitors from the US and Europe.

"Chinese mobile payment services have been tested with handling the massive amount of concurrent access requests during the Double 11 shopping festival and the Spring Festival travel rush. And the operation of Chinese telecommunication companies like Huawei and ZTE has also laid a solid foundation for Chinese mobile payment service to sprout in the continent," Xiang said.

Huawei's official website showed that the company has reached an agreement with WorldRemit, a cross-border remittance platform in 2017 to provide international transfer services for 100 million Huawei mobile phone accounts in Africa.

The digital economy powered by mobile payment has become a new growth point in the China-Africa cooperation, Qian Keming, vice minister of the China's Ministry of Commerce, said during a press conference on Wednesday.

"Now friends in Africa are also doing livestreaming to sell goods. We can directly purchase coffee sold by African farmers and many African agricultural products are very popular in China," Qian noted.

A report produced by Google and the International Finance Corporation estimated that Africa's digital economy would reach $180 billion by 2025, accounting for 5.2 percent of the continent's gross domestic product. By 2050, it could grow further to $712 billion, or 8.5 percent of GDP.