African GDP (Gross Domestic Product) growth continues to fall short of the magic 5% annual figure often given as the number needed to make a substantial dent in poverty.
In South Africa, again officially the continent’s biggest economy, growth went negative in the first quarter of this year. In erstwhile promising Nigeria, GDP contracted a disturbing 13,4% in the first quarter of 2018 compared to the previous quarter.
The World Bank says Sub-Saharan Africa’s growth is projected to reach a ‘moderate’ 3,1% in 2018 and bemoans the ‘slower than expected’ uptick in the critical oil industry.
With consumer inflation one of the few economic indices appearing to be on the increase, is there a magic bullet we can aim at Africa’s economy? Yes, says African fintech firm, TrustPay.
TrustPay is a secure payments enabler and the company has built a successful business in connecting Africa’s disparate payment systems. Without this example of homegrown African innovation, first-world transaction instruments like Visa and Mastercard would find it more difficult to transact with the plethora of ring-fenced, territory-dependent informal money systems used by the majority of the continent’s one billion, primarily unbanked consumers.
“Bringing millions more Africans into their respective countries’ formal economies is a sure-fire way to radically boost GDP growth,” says TrustPay’s Sean Conde.
He gave the example of South Africa where strategies aimed at financial inclusion saw the proportion of adults with bank accounts rise from 46% in 2004 to 75% a decade later. During this time, and tellingly, the country experience its longest-ever period of unbroken economic growth. “The greater the banked population, the greater the economic growth,” says Conde.
He explains that TrustPay’s raison d’être was to create a better Africa through the development of smart fintech interoperability solutions that facilitate transactions across disparate continental money systems.
Financial inclusion by bringing more emerging market citizens into the formal banking system is a major human developmental goal and one that has been the driving force behind TrustPay since the payment enabler’s commercial launch in 2012.
“TrustPay elegantly solves the issue of interoperability between informal and formal money systems. We are today, across the African continent and elsewhere, very similar in function to the Saswitch system initiated by SA banks decades ago,” explains Conde.
The company is the first secure payments enabler to use the Software-as-a-Service (Saas) model to facilitate financial transactions across emerging markets, boosting the interoperability objective. On-demand transactions between emerging market online merchants and established credit card companies like Visa and MasterCard, as well as emerging market payment providers processing the lion’s share of transactions, are now seamlessly assured.
TrustPay’s cloud-based SaaS solution, unparalleled emerging markets access and collaboration with established payment sources helps merchants across diverse consumer categories focus on their core business of making sales while TrustPay makes payments.