Kenya and South Africa: Leaders in the Transition to Cashless…

Kenya and South Africa are progressing toward cashless economies through digital payment systems and mobile money. Predictions indicate that Kenya may run out of cash machines in 28 years, while South Africa may follow in 32 years. Kenya leads in digital payments, and both nations face challenges such as financial inclusion and service downtime.

Kenya and South Africa are making significant strides toward becoming cashless economies, propelled by digital payment systems and mobile money. Both countries, renowned for their embrace of technology, are witnessing a transformation in their financial landscapes that emphasizes contactless transactions. A notable prediction indicates that Kenya may exhaust its cash machines in 28 years, while South Africa is projected to do so in 32 years.

Kenya has established itself as a leader in Africa’s digital payments arena, significantly influenced by its high mobile phone penetration rates and an increasing proportion of the population gaining access to banking services. The introduction of M-Pesa in 2007 revolutionized mobile money in Kenya and remains a key driver of this cashless transition. Additionally, growing financial literacy contributes to the nation’s shift away from cash.

South Africa is also advancing toward a cashless economy, underpinned by governmental initiatives that favor electronic payments. Despite a notable segment of the population remaining unbanked, statistics show that approximately 95% of South Africans have engaged in at least one digital payment transaction, reflecting a rising trend in digital financial interactions.

Globally, the movement away from cash is evident, as seen in declining ATM availability, which underscores a broader shift toward digital transactions. A study by Merchant Machine, utilizing World Bank data, forecasts that Norway may emerge as the first fully cashless country within 11 years, while Kenya and South Africa are on their own trajectories toward cashlessness in the coming decades. Challenges such as financial exclusion and potential service outages, however, continue to threaten the pursuit of a fully cashless system in these regions.

In conclusion, Kenya and South Africa are poised to become leaders in the transition to cashless economies, driven by the adoption of digital payment systems and mobile money. While Kenya is expected to deplete its cash machines in 28 years and South Africa in 32 years, challenges remain, including financial exclusion and service reliability. Nevertheless, the promising trends in digital payments continue to shape the financial landscapes of these nations.

Original Source: africa.businessinsider.com