Financial Inclusion: Nigeria leads in instant payment system inclusivity index in Africa— Report

Nigeria’s instant payment system is projected to advance to the maturity inclusion spectrum ahead of other payment systems in Africa, according to the latest report on inclusive instant payment systems.

The State of Inclusive Instant Payment (SIIP) is an annual report published by the AfricaNenda Foundation. It highlights the latest developments in the instant retail payment system (IPS) ecosystem on the continent and evaluates how inclusive these systems are in terms of functionality and governance.

The 2024 report was launched on Wednesday in Accra, Ghana, with monetary regulators, fintech experts, and other stakeholders in attendance.

Instant payment systems (IPS) are retail payment systems that are open-loop, enabling irrevocable, low-value, digital credit push transactions in near real-time, available 24 hours a day and 365 days a year.

According to the report, IPS systems in Africa were studied and graded on an inclusivity spectrum: basic level, progressive level, and maturity level.

While no IPS has yet reached the maturity level, Nigeria’s NIP (NIBSS Instant Payment) is, according to the report, the only one poised to move to the maturity level in the near future.

“NIP in Nigeria currently has the highest likelihood of reaching mature inclusivity in the short term, as it has integrated all use cases and only falls short on providing additional recourse channels for end users,” the report reads in part.

At the launch of the report, the NIP team, led by the CEO and Managing Director of NIBSS, Premier Oiwoh, received a standing ovation from participants.

Methodology

The inclusivity spectrum grades IPS depending on whether systems offer certain functionalities and meet specific criteria. The grading includes basic, progressed, and mature inclusivity levels,

The inclusivity spectrum graded 21 IPS, with 12 classified at the basic inclusive level and nine at the progressed level.

At the basic spectrum, IPS systems enabled person-to-person (P2P) and person-to-business (P2B) transactions but failed to provide cross-domain interoperability. Two Nigerian IPS, Nigeria Mobile Money and eNaira were included in the basic grading list.

The 12 IPS within the basic inclusivity spectrum are Kenya Mobile Money, Madagascar Mobile Money, Nigeria Mobile Money, RTC South Africa, Taifa Moja Tanzania and Uganda Mobile Money.

Others are Meeza Digital Egypt, EthSwitch Ethiopia, Gamswitch The Gambia, MarocPay Morocco, SIMO Mozambique and eNaira Nigeria.

At the progressed level, nine instant payment systems were included because they allow all licensed PSPs to utilise the system, engage in pro-poor governance through joint decision-making, and involve the central bank in governance.

Additionally, these systems have made strides towards including non-bank participants in decision-making processes through the establishment of working groups and forums.

The nine IPS at the progressed level are GIP Ghana, Natswitch Malawi, Ghana MMI, MauCAS Mauritius, NIP Nigeria, TIPS Tanzania, NFS Zambia, ZIPIT Zimbabwe and GIMACPAY.

Ten IPS were not ranked as they failed to fulfil the baessentialnclusivity criteria, primarily due to their inability to enable person-to-business use cases.

The report is available for download here.