New Inter-Continental Payment Methods Overtaking U.S. Dollar In Africa
SWIFT, the “global provider of secure financial messaging services,” has recently published a report stating that the U.S. dollar is losing its place as the top inter-continental currency in Africa.
According to the report, African usage of the dollar dropped from 50% in 2013 to 45.1% last year. This is due to citizens switching more to local currencies and mobile payments—possibly including cryptocurrencies—to handle international transactions.
Both the South African rand and the West African franc are leading the adoption charge. The franc is on top, making up to 7.3% of payments last year – up 4.4% from 2013. The rand is just behind, however, hitting 7.2% of usage, up from 6.3% in the same period. The British Pound is also beginning to drop, moving from 6.2% to 4.6% of transactions. However, the euro contrasts this at 26.5% to 29.4%.
Interestingly, the number of Sub-Saharan Africans with bank accounts has stayed the same since 2014, but the number of those using mobile money has doubled to 21%. Overall, this increase has lead to mobile payments making up 6.4% of all payments last year, rising from 5.5% in 2013.
SWIFT plans to get involved with Africa even more as time goes on:
“Africa is an important region for SWIFT. SWIFT traffic growth across the continent is impressive with year-on-year growth exceeding 10% for the last decade. SWIFT opened its first African office in Johannesburg, South Africa in 2002. It has since expanded its footprint, opening two new offices in Accra, Ghana and Nairobi, Kenya to get closer to its customers.”
Suggested Reading : Learn about a coin often used for remittances—Stellar (XLM).
While it’s difficult to say how much of these payments were with cryptocurrency, the 6.4% of mobile statistics clearly means non-fiat currencies. That said, African countries have been adopting blockchain and crypto technologies slowly over the past few years.
According to GSM Association, Africa will likely have 725-million mobile phone subscribers by 2020. This will likely lead to higher cryptocurrency adoption in the country.
SWIFT comments on the matter:
“With mobile money and other digital financial services, people can store money securely, spend it effortlessly, and afford the small fees charged by their providers.”
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