THIS week our business reporter Melody Chikono (MC) spoke to Visa country manager for Southern Africa, Jabu Basopo (JB, top picture) to understand how they have negotiated a tricky the Zimbabwean and African terrain in the age of the coronavirus. The Visa boss brings fresh perspectives to the transformation of payment systems in Africa and relays a message of hope — for Africa, he says, the sky can only be the limit for firms with interests in the digital payments sector. Visa facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit cards, debit cards and prepaid cards. Here is how they interacted:
MC: How has the shift to digital banking been beneficial to you?
JB: The financial sector is undergoing rapid change and payment choices now range from cash, card and debit orders to mobile payments and real-time online internet payments. In many parts of Africa, we have seen an evolution toward cards and other digital forms of payment. Visa is continuously working with the public and private sectors to help develop a market that has access to the most secure and convenient digital payments solutions such as eCommerce solutions, contactless payments, Visa on Mobile and Mobile-Point-of Sale.
MC: How has the outbreak of Covid-19 affected you?
JB: Covid-19 has affected every sector. However, we all recognise that the impact on small businesses has been severe. Many of them are facing an uncertain future. To gain a deeper understanding of the impact of the pandemic on commerce across the Central Europe, Middle East and Africa (CEMEA) region, Visa has conducted a survey of merchants and consumers – the Covid-19 CEMEA Impact Tracker. The findings showed just how severely local businesses have been affected by Covid-19. To help drive awareness of this issue, and to help SMEs survive and thrive during this time, Visa has been actively encouraging consumers to support local SMEs. Small businesses are a vital part of our economy as they create jobs and support innovation.
As we have seen during the Covid-19 crisis, local businesses can be a focal point for community interaction and initiatives.
MC: Tell us about the implications of transaction limits on mobile network operators imposed by government?
JB: Mobile money accounts have spread from East Africa to West Africa and beyond. The region is home to eight economies, where 20% or more of adults use mobile money accounts only. These are Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe. Opportunity abounds for Visa to continue to be a strong enabler and collaborator for mobile network operators.
MC: What can you say about your cross-border payments given that Covid-19 crippled the tourism industry?
JB: Covid-19 has crippled many industries, but as economies begin to open, we are confident that businesses will start taking advantage of cross-border sales as they still present a world of opportunity.
MC: What is your comment on the interoperability of infrastructure of African payment systems and Zimbabwe in particular?
JB: There is a tremendous opportunity, especially in rural communities, to offer safe, reliable and convenient financial services. This can be achieved by creating the right environment domestically — including one that enables competition and fosters responsible innovation as a starting point. But given the inherent interconnectedness of the digital economy, this alone is not enough. Now is the opportunity to work together with all ecosystem stakeholders to bring our perspectives, influence outcomes and ensure that the benefits of digital trade are widely shared.
MC: What can you say have been your major innovations over the years?
JB: At Visa, we are engaged at the frontier of payments experiences, payments technology and new payments players to extend the reach and impact of the Visa network through partnerships and venture investments. Here, we’re working with traditional and new issuers and developing new products and capabilities to reach the unbanked and under-banked. We’re also supporting entirely new buying experiences with capabilities like tokenisation. An example of this is PalmPay, an application preloaded on smartphone and sold throughout Africa. Through our partnership, Visa credentials will be directly embedded out of the box on up to 20 million devices in Nigeria, Ghana and Tanzania this year alone. This is a first of its kind.
MC: What is your long-term plan for Zimbabwe?
JB: Zimbabwe along with the rest of Africa is central to Visa’s long-term growth strategy, especially when you consider how cash is still a primary payment option for millions on the continent. There is a tremendous opportunity, especially in rural communities, to offer safe, reliable and convenient financial services. And in fact, many African markets have leapfrogged older technologies to offer advanced digital payment services to merchants and consumers.
MC: What is your comment on the future of payment systems in Africa?
JB: Sub-Saharan Africa is still primarily a cash-based society, but the need for safe, reliable and convenient financial services has become more pressing. Today, consumers expect services that are seamless, frictionless, on-demand, mobile-enabled and personalised. In sub-Saharan Africa we have seen an explosion in e-commerce, as consumers turn online to meet their needs. Before the pandemic, we were seeing an increase in digital payments across sub-Saharan Africa, but Covid-19 has accelerated this trend as behaviours change. As consumers spend more time at home, online spending is only set to increase with digital payments being the safer way to pay in a pandemic, but this has no sign of slowing post-Covid-19.
MC: What key innovations does Africa need?
JB: The penetration of mobile phones in emerging markets is growing at such a fast rate that the likelihood of consumers owning a smartphone is very high, even if they do not have a bank account. Today, individuals are always connected to their smartphones and consuming an increasing amount of digital content and services. sub-Saharan Africa remains the fastest-growing mobile region globally, with 477 million mobile subscribers at the end of 2019.
In Africa, mobile payments can play a big role in expanding the digital acceptance footprint as it would empower significant portions of the population and enable them to transact digitally. By digitising payments, we create economic efficiencies and transparency, which in turn bolsters confidence. We help the retail sector grow and unlock new channels like eCommerce. We enable more effective and safer travel and tourism by enabling people to use their cards and carry less cash.