Mobile is an “enabler” for commerce in Africa given increasing penetration rates but it is still early days in terms of people making payments via their phones.
That is according to panelists at this week’s AfricaCom event in Cape Town, who were discussing m-commerce in Africa and the growth in transacting through digital technology.
Mark Bradshaw, chief executive officer (CEO) of South African m-commerce startup SnapNSave, told the audience mobile was simply an enabler, allowing more personalisation to enter the shopping experience.
“It allows personalisation. You have access to things wherever you are. We are moving towards a more decentralised shopping experience. That is what is exciting about mobile. It is about how and when you want to shop,” he said.
Johan Meyer, CEO of South African mobile payments startup Wallettec, agreed.
“It gives people the ability to make a purchase and a payment from anywhere at anytime,” he said.
Bradshaw said there had been a shift in the market, with everybody wanting to own mobile wallets. However, increasingly niche services are developing within the industry, with startups specialising in different areas and providing a better all round experience.
“With specialisation you are getting better quality services because you are getting guys eating and drinking these services, day in and day out,” he said.
Another South African payments startup, Peach Payments is carving out a niche for itself as a payments gateway for online commerce, and expanding across Africa. Co-founder Andreas Demleitner, however, said the company saw little difference between e-commerce and m-commerce.
“From day one we wanted to get the mobile experience right. The banks didn’t want to hear that, but now it is a different story,” he said.
Yet the potential for m-commerce and mobile payments is different depending on the market, according to Bogdan Sacuiu, chief commercial officer of the Sweden-based payments firm Seamless Distribution Systems, which is active in a number of African countries. Approaches need to vary depending on factors such as card penetration, smartphone penetration, and existing infrastructure in each market.
“You need to create a model that is appropriate to each market,” he said. “The point is to create some convenience and find out who your buyers are.”
How Africans use their mobiles is also changing when it comes to transactions. Meyer, whose company Wallettec is active across a number of African markets, said in the past it had been common for people to withdraw their funds from their mobile wallets immediately upon receiving payments. This is increasingly less the case as people begin to trust mobile more.
“People are leaving their money in their mobile wallets now because they realise it is safer and more convenient. People are starting to learn that, though cash will always be king, it is better to keep your money in a mobile wallet,” he said.
In spite of these positive developments, Demleitner said it is still very early days for mobile commerce and mobile payments in Africa.
“Even South Africa is not very sophisticated yet. We have seen huge growth in Africa in terms of mobile penetration, but that does not mean these people are all comfortable finalising a payment process online. Even when card penetration is very high it is not a given that online payments are also high,” he said.
The way in which people begin transacting via mobile may also be different in Africa to how it developed elsewhere in the world, according to Bradshaw, with physical experiences of mobile likely to be the main enabler for more mobile commerce.
“The gateway to purchasing online will not be the traditional gateway. People will transact with mobile in the physical world and then begin to trust the system. I think we might find a very different journey. The migration will happen slightly differently,” he said.
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