Digital payments and the African Continental Free Trade Area Agreement

By Olabisi Famojuro

Humans are built to trade. Across eons, trade has connected people and communities. It unlocks human productivity. It is the precursor of commerce and the harbinger of development. Payments drive trade.

In today’s information society, digital payment is an indispensable enabler of trade. This is precisely why experts have more or less hinged the success of the African Continental Free Trade Area agreement on the success of digital payments. “We need to put as much effort as we are putting into getting the operational blocks of the agreement and secretariat going into getting the African payments regulatory landscape similarly integrated. Payments across the continent could probably be made seamless today. The technology is there,” says Dr. Augustina Odame of the Ghana Chamber of Technology.

The African Continental Free Trade Area (AfCFTA), which formally commenced operation in January 2021, has been in the works since 2018. AfCFTA was created essentially to boost trade within the African continent and among member states through the provision of comprehensive and mutually beneficial trading opportunities for both exporters and importers. The agreement covers everything from trading goods and services to investments and intellectual property rights. It equally includes competition policy between and within African countries, guidelines and framework to drive trade across the African continent.

Experts of various shades in analysing the emergence of AfCFTA see promise of a truly connected single pan-African market. With a population tipping just over a billion people, Africa is ripe for trade.

Cross border trade holds incredible potential. It can also be opportunities for the continent; opportunity to build new and enduring infrastructure, boost e-commerce and fast-track digital payment. Existing players in this space would provide the requisite leadership to drive digital payments across Africa thereby boosting trade. Interswitch, for instance, is providing leadership here.

Interswitch is not just creating platforms and deploying digital technologies, more importantly, it is enabling others to ride on its wings and provide innovative solutions. It is actively involved in creating solutions that enable individuals and communities to prosper across Africa. For Interswitch, Africa is the continent where digital payments should be a seamless part of everyday life. “Over the last few years, we have invested extensively in building and continuously developing a variety of payment channels which facilitate real-time transaction through any means desirable by all parties within the payment process. Our vision at Interswitch is an Africa where payment becomes a seamless part of our everyday life,” says Interswitch’s founder and Group Chief Executive Officer, Mitchell Elegbe,
Security is a huge concern with digital payments. The rise in cybercrime is escalating apprehensions. Interswitch has shown that it adheres to best-in-class security solutions that align with global standards. According to the company, its solutions offer two-factor authentication; it is NDPR compliant with guaranteed transaction security and secure cloud option.

Today, almost any bill payment is possible on Interswitch’s digital payment platform, Quickteller. It offers a digital banquet, in every sense of the word. Beyond payments, Quickteller users enjoy an easy connection to the activities that power their modern lifestyles, such as flights, events, and global shopping.

The company’s widely accepted card scheme connects everyday people to easy payment options that are accessible within and beyond the continent. The Interswitch Verve card is now issued and or accepted in several countries across the continent. The Verve global card also ensures that Africans making payments beyond the continent have access in over 185 countries globally.

From massive industries to small businesses, Interswitch’s payment solutions are suitable for every business size or type. The company now provides much of the rails for Nigeria’s online banking system that serves Africa’s largest economy and population of about 200 million people.

Africa’s leading corporate organisations, small businesses and individuals depend on Interswitch to power their payments. Increasingly, Interswitch leverages partnerships to drive borderless trade across the continent, collaborating with countries’ switching systems to ensure seamless payment on the continent, across multiple platforms.

The firm’s creation and sustenance of a payment ecosystem is exactly the sort of initiative that would drive the free trade agreement.

The continent must yet deal with the perennial issues of ICT infrastructure deficit, the growing digital divide, regulatory inadequacy and gaps in the policy framework. For trade to thrive across borders, initiatives such as AfCFTA are invaluable. AfCFTA is not an end in itself. It would help to flip the switch to turn things around. But it is only a start. It would need plenty of support to remain sustainable.

The often flaunted enabling environment, which actually is a euphemism for governments to step up and play their role of driving the establishment of essential facilities, including road connections, relevant policy frameworks and provision of necessary guarantees, is needed here. In relation to payments, enabling environment would include government policies that promote and encourage investment in relevant digital infrastructure. There must be deliberate actions for results to manifest.

In addressing the digital divide, the priority should be on the widespread provision of affordable high-speed broadband internet. The availability of broadband should be treated as a human right. Internet connection is needed to close the digital divide, improve access to digital services and enable electronic payments.

Experts insist that AfCFTA will drive e-commerce and digital payments across Africa. But it is equally true that e-commerce and digital payments would propel AfCFTA, ensuring its success. It is a win-win situation.

AfCFTA has massive potential. Technology would prove a major driver to enhance opportunities for cross border trade under the agreement. The availability of interoperable platforms would no doubt help to drive ease of doing business, improve effective electronic tracking systems and simplify the custom and exercise function.

The governments in the 54 countries across the continent must continue to stand behind the agreement and demonstrate good faith for AfCFTA to accomplish its set goals.

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