By Ishmael Bangura *
Africa’s fintech industry, long celebrated for pioneering mobile money and digital payments on a scale, is entering a more complex and consequential phase of growth—one that will test whether the sector can move from enabling transactions to powering broad-based economic transformation.
A 2026 report by Boston Consulting Group, “Beyond Payments: Unlocking Africa’s Second FinTech Wave,” finds that while the continent has built one of the world’s most advanced digital payment ecosystems, future growth will depend on expanding into credit, financial infrastructure and cross-border integration—areas that remain significantly underdeveloped.
The report estimates that Africa’s fintech revenues could rise from roughly $10 billion to more than $65 billion by 2030, representing a more than sixfold increase. This growth is expected to be driven by rapid urbanization, a population projected to exceed 1.7 billion by 2030, and smartphone penetration that is forecast to surpass 50 percent across the continent.
Yet the report is unequivocal: payments alone will not deliver that growth.
“Africa has led the world in mobile money adoption, but the next phase of fintech will be defined by depth, not just reach,” BCG said.
Sub-Saharan Africa today accounts for nearly 70 percent of global mobile money accounts and processes over $800 billion in mobile money transactions annually, according to figures cited in the report. In markets such as Kenya, mobile money transactions already exceed 50 percent of GDP, underscoring the scale and systemic importance of digital payments.
However, this success has not translated into equally strong access to broader financial services.
More than half of African adults still lack access to formal credit, and informal lending continues to dominate in many economies. For businesses, the gap is even more pronounced. Small and medium-sized enterprises—often described as the backbone of African economies—face a financing shortfall estimated at more than $330 billion.
“The first wave of fintech in Africa solved access to payments,” the report said. “The second wave must address access to credit, savings, insurance and broader financial services that drive economic productivity.”
This transition marks a structural shift from fintech as a transactional layer to fintech as an economic engine.
Payments currently account for an estimated 70 to 80 percent of fintech revenues across Africa, driven largely by peer-to-peer transfers, remittances and merchant payments. But BCG projects that by 2030, new segments such as digital lending, embedded finance and business-to-business financial services could contribute up to half of total industry revenues.
Digital lending alone represents one of the largest growth opportunities. The report suggests that alternative data—ranging from mobile money transaction histories to e-commerce activity and utility payments—could unlock credit access for tens of millions of previously underserved consumers.
“Data is becoming the new collateral,” BCG noted, adding that fintech players that effectively leverage data analytics and artificial intelligence could significantly reduce default risks while expanding lending portfolios.
Africa already generates massive volumes of financial data, but much of it remains fragmented across platforms. The report estimates that fewer than 10 percent of fintechs currently have access to comprehensive, interoperable data systems, limiting their ability to scale credit offerings.
Unlocking this potential will require robust data-sharing frameworks, open banking policies and digital identity systems that can support secure and seamless verification processes.
Without these foundational elements, the report warns, Africa’s fintech sector risks remaining “high-volume but low-value.”
The need for deeper financial integration extends beyond consumers to businesses. While consumer payments have surged, a significant share of business transactions across Africa remains cash based. In some markets, more than 80 percent of small business transactions are still conducted in cash, limiting transparency and access to finance.
Digitizing these flows could have a transformative impact. BCG estimates that shifting even 20 to 30 percent of informal business payments into digital channels could unlock billions of dollars in additional lending capacity by improving financial visibility and creditworthiness.
Cross-border payments present another major opportunity, particularly in the context of the African Continental Free Trade Area. Intra-African trade currently accounts for less than 20 percent of total trade on the continent, compared to over 60 percent in Europe.
High transaction costs are a key barrier. The report notes that cross-border payment fees in Africa average between 6 and 10 percent—among the highest in the world—while settlement times can stretch to several days.
“Africa’s financial systems remain highly fragmented, which limits scale and increases costs,” BCG said.
Efforts such as the Pan-African Payment and Settlement System aim to address these challenges, but adoption remains uneven. The report estimates that fully interoperable cross-border payment systems could reduce transaction costs by up to 50 percent and significantly boost intra-African trade volumes.
Infrastructure gaps remain a central constraint.
While countries such as Nigeria and Kenya have developed relatively advanced payment systems, others lag behind in digital infrastructure, creating an uneven playing field across the continent. Only a limited number of African countries currently have fully operational digital identity systems, and interoperability between payment platforms remains inconsistent.
BCG calls for coordinated investment in digital public infrastructure, including real-time payment rails, national ID systems and standardized APIs that enable seamless integration across financial service providers.
Global examples such as Brazil’s PIX and India’s UPI have demonstrated how such infrastructure can accelerate adoption and innovation. In India, UPI processes more than 10 billion transactions monthly, illustrating the scale that can be achieved with coordinated systems.
Africa, the report suggests, has the potential to replicate and adapt these models, but doing so will require stronger alignment between governments, regulators and private sector players.
Regulatory fragmentation remains one of the most significant barriers to scale. Fintech companies operating across Africa often face multiple licensing regimes, differing compliance requirements and inconsistent supervisory frameworks.
BCG estimates that these inefficiencies can increase operating costs by as much as 30 percent for companies expanding across multiple markets.
“Predictable and harmonized regulation is essential for scaling fintech businesses,” the report said, calling for greater alignment in licensing, Know-Your-Customer requirements and cross-border regulatory standards.
Investor interest in African fintech remains strong, but funding patterns are evolving. While the sector has attracted billions of dollars in venture capital over the past decade, the report highlights a growing gap in growth-stage funding.
Early-stage investments account for the majority of deals, while later-stage funding remains limited—particularly in local currency. This mismatch creates challenges for fintech firms seeking to scale sustainably.
BCG estimates that less than 20 percent of fintech funding in Africa is denominated in local currencies, exposing companies to foreign exchange risks and limiting their ability to serve domestic markets effectively.
“Capital is available, but it is not always aligned with the long-term needs of the ecosystem,” the report said.
Local institutional investors, including pension funds and insurance companies, are expected to play a critical role in bridging this gap, alongside development finance institutions.
As the fintech ecosystem expands, so too do risks. Fraud, cybersecurity threats and data privacy concerns are increasing, particularly as transaction volumes grow.
The report notes that fraud losses in digital financial services have been rising in several African markets, highlighting the need for stronger security frameworks. Building trust will be essential to sustaining adoption, particularly as fintech services expand into more complex areas such as lending and insurance.
“A secure and trusted ecosystem is the foundation for long-term growth,” BCG said.
Africa’s fintech sector has already demonstrated its ability to innovate at scale, leapfrogging traditional banking systems and delivering financial access to millions. But the next phase will require a more coordinated and strategic approach.
The opportunity is significant. With a young, rapidly growing population and increasing digital connectivity, Africa is well positioned to become one of the world’s most dynamic fintech markets.
But success is far from guaranteed.
“The opportunity is not just to move money more efficiently,” the report concludes. “It is to use fintech as a catalyst for inclusive growth and economic transformation.”
As Africa moves into this second wave, the focus is shifting from access to impact—from building payment rails to building financial systems that support businesses, create jobs and drive economic development.
The coming decade will determine whether Africa’s fintech revolution evolves into a globally competitive ecosystem—or remains defined by its first success: payments.
*Culled from May Edition of PAV Magazine
