Digital finance is now being used to stem the spread of COVID-19 in Africa. Africa governments and startups are taking all measures to avert all payment transaction from cash into mobile money in order to stem the spread of COVID-19 in Africa. This is in line with the World Health Organisation in limiting the spread of the coronavirus.
With cases of coronavirus fast increasing, Kenya has turned to mobile money as a public health tool in curbing the virus. Safaricom, which is the country’s largest telecom has implemented a fee-waiver on M-pesa that allows all person to person transaction below 1000 Kenyan shillings to be free for 3 months. This is to reduce the physical exchange of currency among citizens of the country.
M-Pesa which has 20.5 million customers and a network of 176,000 agents in Kenya, stands as Africa’s 6th largest economy. Across Kenya’s population of 53 million, M-Pesa has 20.5 million customers and a network of 176,000 agent. This means that roughly 60% of the country’s population has access to mobile-money.
Ghana is also using digital finance to stem the spread of COVID-19 in Africa. Ghana’s central bank gave a directive to mobile money providers on March 20 to waive fees on transactions of GH₵100 (≈ $18), with restrictions on transactions to withdraw cash from mobile-wallets.
Another directive from Ghana’s monetary body also issued a KYC requirements on mobile-money, allowing citizens to use existing mobile phone registrations to open accounts with the major digital payment providers.
The increasingly rate of the spread of the coronavirus in Africa has caused the WHO to sound an alarm. This has prompted Africa countries and tech companies to include mobile finance as part of a broader response.
According to statistics by the World Health Organisation, on Monday there were 1321 COVID-19 cases in Sub-Saharan Africa and 34 confirmed deaths related to the virus — up from 463 cases and 10 deaths last Wednesday.
The country with 40% of the region’s cases is South Africa, which declared a national disaster last week, banned public gatherings and announced travel restrictions on the U.S.
Unlike Ghana and Kenya, the South African government hasn’t issued any directives yet towards mobile payments, but the situation with COVID-19 is pushing fintech startups to act.
With the increasingly rate of coronavirus cases in South Africa, Yoco CEO, Katlego Maphai has issued a directive to clients to encourage customers to use the contactless payment option on its point of sale machines. The startup has also accelerated its development of a remote payment product, that would enable transfers on its client network via a weblink.
“This is an opportunity to start driving contactless adoption,”
Maphai told TechCrunch on a call from Cape Town.
Nigeria on the other hand which is Africa’s largest economy and with population of about 200 million people, the growth of COVID-19 cases has geared the country toward electronic payments and prompted one of the country’s largest digital payments startups –PAGA to act.
PAGA has made a fee adjustment which allows merchants to accept payments from PAGA customers for free.
This is “aimed to help slow the spread of the coronavirus by reducing cash handling in Nigeria,” according to a company release.
According to PAGA’s CEO Tayo Oviosu:
“Parts of Lagos — which is connected to Nigeria’s largest commercial hub of Lagos State — have begun to require digital payments in response to COVID-19. We’re seeing some stores that are saying they are not accepting cash anymore,”
PAGA already offers free P2P transfers on its multi-channel network of 24,840 agents and 14 million customers. The startup (that recently expanded to Mexico and recently partnered with visa) will also allow free transfers up to roughly 5000 Naira (≈ $15) from customer accounts to bank accounts, to encourage more digital payments use in Nigeria.
Tayo believes the current COVID-19 crisis will encourage more digital finance adoption in Nigeria, which has shown a cash-is-king reluctance by parts of the population to use mobile payments.
Tayo said :
“I think it will help move the needle, but it won’t be the final straw that breaks the camel’s back,”
Time and research will determine if efforts of African governments and tech companies to encourage digital payments over physical currency yield results in halting the spread of COVID-19 on the continent.
It is a unique case-study of mobile finance in Africa being employed to impact human behaviour during a public health emergency.
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