In just a few years, mobile digital payments have shifted from a convenience to a core feature of Africa’s financial landscape. The surge in contactless payments and the popularity of mobile wallets are reshaping how consumers and businesses transact and laying the foundation for a cash-light and invisible-payment economy.
“Payments are often the first point of digital engagement for consumers,” says Hennie Dreyer, CEO of Direct Transact, a South African banking-as-a-service (BaaS) and Payments-as-a-Service (PaaS) provider that connects banks and fintechs to the national payment system. “The pace of change we’re seeing across Africa in contactless, mobile and real-time rails—reflects both consumer demand and the innovation capacity of local players.”
Contactless goes mainstream
Contactless payments have evolved significantly in Africa, transitioning from simple Radio Frequency Identification (RFID) technology—to communicate wirelessly using radio waves for non-contact identification, data capture, and tracking—to sophisticated tokenization and digital card systems, says Dreyer.
He explains, “Initially, contactless payments relied on near-field communication (NFC） technology, allowing users to tap physical cards on readers for quick transactions. This was convenient, but security concerns quickly mounted. To solve the issue, technology providers moved towards tokenization as a critical advancement to replace sensitive card details with unique, encrypted digital tokens that make it useless for hackers to intercept communications. This paved the way for digital cards, which integrate seamlessly into mobile wallets like Apple Pay, Google Pay, and Samsung Pay, so that multiple tokenized cards can be managed on a single smartphone or wearable. At the same time, these advances paved the way for biometric authentication and dynamic token generation. This led us to a new era of convenience, where users can now make secure payments, access loyalty programmes and manage transactions entirely from their devices.”
According to recent research, in South Africa contactless payments now make up more than half of all card transactions in urban centers, while adoption is accelerating in Kenya, Nigeria and Egypt. The pandemic served as a catalyst, with health concerns nudging consumers to swap swipes and cash for tap-and-go.
“Once consumers tried contactless, and especially the newest safer iterations now in play, they realised it was not just safer but faster,” Dreyer notes. “The speed benefit is critical in high-volume environments like retail and transport, and it’s why we believe contactless is here to stay.”
Merchants are responding, with banks and fintechs rolling out low-cost contactless acceptance tools, including NFC-enabled smartphones that double as point-of-sale devices.
Mobile wallets move beyond P2P
Mobile wallets are reshaping Africa’s payments narrative. International research highlights that digital wallets are expanding from peer-to-peer (P2P) transfers to everyday commerce. In markets such as Kenya, where mobile money apps dominate, wallets are already used for bills, salaries and lending. South Africa has lagged, but newer players are rapidly entering the market, supported by Application Programming Interfaces (APIs) and regulatory frameworks that enable interoperability.
“Wallets are no longer just for sending money to family,” says Dreyer. “They’re becoming the digital hub for financial lives – whether that’s buying groceries, managing credit or paying for a ride-hailing service. The opportunity is enormous, particularly in under-banked communities where wallets offer the first step into formal finance.”
What the future holds
Looking ahead, the convergence of real-time payments, mobile wallets and contactless rails will accelerate Africa’s digital commerce boom, Dreyer predicts.
Globally, digital payments are increasingly being embedded into apps and platforms, making transactions seamless and invisible.
“In five years’ time, the idea of ‘making a payment’ may disappear into the background,” Dreyer predicts. “Whether you’re tapping a phone, paying via WhatsApp, or using a connected car to pay for fuel, payments will be instant, contextual and invisible.”
For Africa, this future hinges on infrastructure. Platforms like PayShap in South Africa and Pan-African real-time initiatives are vital to ensure inclusivity and interoperability.
“The promise of digital payments isn’t just about technology,” Dreyer concludes. “It’s about access. When the right rails are in place, we unlock opportunity – for SMEs, for consumers, and for Africa’s economies as a whole.