For a long time, in Africa cash was king, and the only payment option available to most of the population, with only about a quarter of the continent’s population making use of bank accounts according to a World Bank Study. This means that around 900 million people had to rely on exclusively on cash purchases in Africa alone.
This was an extremely limiting state of affairs – without credit cards, people were unable to make online purchases and as a result, certain services, particularly in terms of travel, were completely off the table to African clientele. As stated in the latest World Travel Market (WTM) Global Trends Report, for many consumers, travel and online booking of tickets appeared to be an unrealistic dream.
But in just a few short years, this has changed completely with almost every African on the continent owning a mobile phone, resulting in a revolution in terms of mobile money services. This means that for the first time, many Africans can book and pay online through their mobile devices.
One of the great success stories of Africa’s mobile money revolution is M-Pesa in Kenya – a phone-based money transfer services that enabled Kenyans to deposit, withdraw, transfer money and pay for goods easily with a mobile device. Within a few years of launching, it had grown to become the most successful mobile-based financial services in the developing world, used by two-thirds of Kenya to make purchases, including travel, and has since been launched in South Africa and India.
A number of African airlines have already entered into agreements with mobile money service providers, and hotels are fast following suit. According to the WTM Trends Report, travel companies that reach out to the unbanked and develop mobile-friendly payment channels are most likely to thrive in an exciting new world of opportunity.