Botswana leads SADC mobile money boom
Lewanika Timothy | Monday September 9, 2024 09:56
Arkwright is a global leading strategy and management firm.
The bullish local mobile money market, as of March 2024, had a total of 1.1 million subscribers, placing the country ahead of its regional counterparts and signifying the strong penetration of local mobile money in Botswana.
The report divulged that despite Botswana’s comparatively high banking card ownership, the mobile money market was strongly on an upswing as well.
“Notably, Botswana stands out in the SADC region for its high adoption of mobile money,” Arkwright researcher said. “The medium-high Mobile Connectivity Index (MCI) suggests that Botswana excels in at least two connectivity factors but does not necessarily have a high connectivity rate overall.”
Despite relatively higher banking rates in SADC compared to other African regions, the report indicates that 13 out of 16 countries have card penetration rates below 30%. Botswana stands out with card ownership rates between 30% and 50% among adults, largely attributed to the country’s effective utilisation of Visa’s top-tier domestic payments infrastructure VisaNet.
The value of transactions conducted through mobile money reached P33.5 billion in the year to December 2023, as more consumers signed up for the services. Previously Botswana Communications Regulatory Authority (BOCRA) officials attributed growth in the mobile money market to the wide acceptance of the service and its convenience related to bill payments, service subscriptions, and money transfers, amongst others. Owing to the convergence between technology and financial services, mobile money is interoperable with traditional bank accounts which have brought about much-needed convenience for users.
The Arkwright report further showed that though the region was experiencing growth in the mobile money market, investments in contactless payment infrastructure remained sluggish, with most retail stores lacking contactless e-payment portals at retailers across the region. This is in comparison to the growth of the use of smartphones to pay for services in the Western world.
“Insufficient investment in card acceptance infrastructure poses a significant challenge to electronic payment adoption in the SADC region. “Most Point-of-Sale terminals lack contactless capabilities, and many switches do not facilitate e-commerce transactions. “This lack of infrastructure investment is especially problematic for small and micro-merchants who require innovative payment solutions like Soft PoS and e-commerce card-on-file,” the report revealed.