Kenya and South Africa are transitioning to cashless economies, forecasted to run out of cash machines in 28 and 32 years respectively. This shift is fueled by mobile payment adoption and government initiatives. Despite hurdles like financial exclusion, significant progress is evident in both nations, marking them as leaders in Africa’s digital payment landscape.
Kenya and South Africa are poised to become cashless economies as they adopt digital payment systems and mobile money solutions. Predictions indicate that Kenya may deplete its cash machines in approximately 28 years, while South Africa is estimated to follow suit in roughly 32 years. This transition is spurred by the widespread use of mobile payments and contactless transactions, significantly transforming their financial landscapes.
Kenya has long led the African continent in digital payments, largely attributed to a high penetration of mobile phone usage and an increase in the banked population. The successful launch of M-Pesa in 2007 has set the groundwork for mobile money dominance, fostering a culture of digital payments and financial inclusivity. Furthermore, rising financial literacy among its citizens continues to accelerate this transition towards cashlessness.
In South Africa, governmental policies are facilitating a shift away from cash, endorsing electronic payments despite challenges stemming from a substantial unbanked demographic. Nevertheless, survey results show that 95% of South Africans have engaged in at least one digital transaction, underscoring the nation’s progress. Both countries are experiencing a substantial decline in the availability of ATMs, indicating a global trend towards digital transactions.
A recent study by Merchant Machine employed World Bank data to assess ATM shrinkage rates, projecting that Norway may become the first fully cashless country within 11 years. The data forecasts that Kenya and South Africa will have completed their transitions within the next few decades, illustrating the rapidly evolving financial ecosystems across the continent and the world.
In summary, both Kenya and South Africa demonstrate significant advances towards becoming cashless economies, driven by the implementation of digital payment systems and mobile money. With predictions indicating the depletion of cash machines within decades, these trends reflect evolving financial practices amid growing mobile technology adoption. While challenges persist, both countries are paving the way for inclusive financial systems that may eventually limit cash reliance.
Original Source: africa.businessinsider.com
