Abstract
This study explores impact factors that affect the adoption of digital payment systems in sub-Saharan Africa. In this article, we investigate the impact factors that subject-matter experts consider most important to the success of FinTech payment models. The data and their responses are evaluated through the lens of Christensen’s market-creation theory, which contends that the adoption of market-creating innovations by a mass swathe of heretofore non-consumers “pulls” framework conditions into place, including missing infrastructure and enabling regulation. Then, we compare the findings with the literature and three case studies of mobile money adoption in Kenya, South Africa, and Nigeria. This study addresses a gap in the literature regarding the payment and money transfer segment of FinTech innovations in Africa using a multiple case study methodology. We drew together information from multiple sources, including semi-structured interviews, archival data in the form of industry and regulatory reports, and observational field notes. Our findings suggest that enabling environments (Kenya) do jumpstart adoption and difficult frameworks (Nigeria) do evolve. This study will help FinTech innovators, academics, and policymakers to understand how technology and framework conditions impact payment business models in Africa.
Highlights
New FinTech firms, business models, and customer solutions are entering the sub-Saharan market at increasingly high rates (EY Global, 2019)
60% of adults in sub-Saharan Africa are unbanked (Demirgüç-Kunt et al, 2018; Medina et al, 2017). These non-consumers of formal financial services deal mainly in cash despite academics, development timreview.ca organizations, and governments urging for their participation in the formal economy because financial inclusion is foundational for poverty reduction and economic growth (Demirgüç-Kunt et al, 2018)
This research methodology is aligned with the purpose of this study, because we want to explore the perceptions of the interviewed experts based on their experience in the digital payment system sector in sub-Saharan Africa, including all the complexities and subtleties of innovative technologies in developing markets
Summary
New FinTech firms, business models, and customer solutions are entering the sub-Saharan market at increasingly high rates (EY Global, 2019). 60% of adults in sub-Saharan Africa are unbanked (Demirgüç-Kunt et al, 2018; Medina et al, 2017). These non-consumers of formal financial services deal mainly in cash despite academics, development timreview.ca organizations, and governments urging for their participation in the formal economy because financial inclusion is foundational for poverty reduction and economic growth (Demirgüç-Kunt et al, 2018). These non-consumers of formal financial services deal mainly in cash despite academics, development timreview.ca organizations, and governments urging for their participation in the formal economy because financial inclusion is foundational for poverty reduction and economic growth (Demirgüç-Kunt et al, 2018). Christensen, Ojomo, and Dillon (2019) state that, in subSaharan Africa, there are great opportunities for businesses that truly understand and enable non-consumers at low margins, and the engagement of the authors sparks institutional evolution and instigates long-term prosperity where the opportunities are adopted
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