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The Convergence of Payment Means for Financial Inclusion

HPS attended “Seamless West Africa” in Ghana, a major banking and fintech event in the region. Abdeslam Alaoui Smaili, Managing Director at HPS, presented the convergence of payment means for financial inclusion, with a focus on Africa. 

Convergence is key for the future of payments. 

First, we should define “convergence of payment means”. Payment means’ and systems’ convergence is a concept that operates at two levels. The convergence of payment methods and the industry convergence accelerated by payment services. 

The convergence of payment methods allows seamless and omni-channel payments, enabling payments in an undifferentiated way (POS, ePOS, mobile POS, Face to Face, Card Not Present, Smart Cash etc.). Regardless of the technology solution used, convergent payment means bring together all the benefits, services and options associated to payments (such as couponing, loyalty systems, lending services, insurances, or even cashback systems).

The second level is industry convergence accelerated by payment services. It means that two different industries get the most out of each other, relying on their respective strengths, leading to both industries being accelerated by payment services. As an example, the banking and telecom industries both benefit from MNOs’ large customer base, high mobile device penetration rate and Banks’ mobile payment technology. Together, they can now offer payment services for the unbanked (e.g. TigoCash, M-Pesa etc.). 

Alongside banking and telecom, convergence draws together different players from different industries, including:      

  • Social media and retail (e.g. Twitter “buy now”, Instagram Swipe-up, Facebook adds etc.),
  • E-commerce and consumer finance (e.g. “buy now pay later”, “one click” options etc.),
  • Transport and travel (e.g. single payment for multi-modal journeys, “pay as you go” option etc.), 
  • Automotive and telematics (e.g. in-car purcharses), 
  • Travel and insurance (e.g. location-based, on-demand, situation-based)…  

Source: How convergence is transforming payment services 

By allowing different channels, industries, payment methods and services to come together, convergence makes the future of payments possible. 

What about Financial Inclusion? 

Globally, about 1.7 billion adults lack an account, and nearly half of all unbanked adults live in just seven economies: China, India, Indonesia, Pakistan, Nigeria, Mexico, Bangladesh (source: Global Findex Database 2017)

Financial Inclusion is offering tailored financial and banking services to the unbanked (the unbanked are described as adults without an account at a bank or other financial institution and are considered to be outside the mainstream). 

Nowadays, governments, financial institutions, start-ups, established private and public companies take the Financial Inclusion duty seriously and are striving to offer this segment the importance it is due by creating adapted financial and banking services. 

Focus on Africa

Africa has a total population of 1.3 billion and counts 454 million internet users. The continent has 177 million Facebook subscribers, 94% of whom use their mobile to access the social network. By the end of 2016, Africa counted 250 million registered active mobile money accounts. 

Sub-Saharan Africa has a population of unbanked adults of about 350 million, representing 17% of the global total. Around 100 million adults in Sub-Saharan Africa currently use mobile money, more than double the number of bank account holders.

How can Convergence help Financial Inclusion? 

Mobile phones and the internet have given rise to a new generation of Financial Services. Over the past years, we have witnessed the rise of Mobile Money, which constitutes a true Financial Inclusion opportunity for the unbanked. 

As mentioned above, in Africa, mobile penetration rates are very strong. Converging the industries and channels (here Banking and Telecom) has been a milestone for Financial Inclusion in Africa. 

However, Mobile Money is still facing some challenges in the region, such as the lack of interoperability and a deficient physical infrastructure. 

Some countries in Africa took convergence and financial inclusion to the next level: Morocco, most notably, launched an interoperable mobile payment scheme. Each bank, mobile network operator and payment service provider will be launching their own wallet platform that will be connected to the national switch to allow for nation-wide interoperability. 

Wallets will allow P2M payments (instant payment from individual to merchant), B2B (merchants will be able to pay instantly and securely their suppliers, and the suppliers will not have to carry excessive amounts of cash), B2P/G2P (salaries, benefits, individual top-ups), P2P (money transfer), P2B (bill payment, mobile top-up). 

The objective of this program is to gradually provide more services to the unbanked customers (starting from the mobile, extending to an account, providing micro-credit…) and minimise cash-out while creating value. 


To know more about HPS initiatives for financial inclusion and convergence of payment means, please contact sales@hps-worldwide.com