How digital wallets are driving financial inclusion in Africa
Digital wallets have emerged as a powerful tool in driving financial inclusion and banking the previously unbanked population in Africa. With their convenience, accessibility, and security, digital wallets are revolutionising financial services and empowering individuals who have historically been excluded from traditional banking systems. SOLmate, a leading online payment platform, is at the forefront of this movement, offering a robust digital wallet solution tailored to the needs of the South African environment, which includes a growing number of foreign national residents.
A digital wallet, also known as a mobile wallet, provides a secure and convenient way to make payments, transfer money, and manage financial transactions. One of the key advantages of digital wallets is their affordability compared to traditional bank accounts. Maintaining a bank account can be prohibitively expensive for the unemployed or individuals living below the poverty line. Digital wallets offer a cost-effective alternative, enabling these marginalised populations to access essential financial services, including payments, savings, and remittances.
SOLmate’s app provides clients in South Africa with a comprehensive digital wallet facility with the option to link a virtual or physical debit card. The platform offers secure online payment options and enables users to shop online safely and withdraw cash from various retail stores and any ATM countrywide. Through the provision of accessible, easy-to-use products , SOLmate is dedicated to driving financial inclusion and improving the lives of individuals and businesses across the country. SOLmate allows for free or low cost receipt and transfer of money and avoids the need for paperwork, branch visits and endless queues.
Jonathan Holden, COO of SOLmate said, “Financial inclusion plays a vital role in transforming lives and driving economic growth. At SOLmate, we are proud to be at the forefront of this transformation, offering a digital wallet solution that empowers individuals and businesses in South Africa. Our platform provides secure online payments, linked debit cards for shopping and withdrawals, virtual cards for safe online shopping, and convenient cash withdrawals from retail stores. We are committed to bridging the financial divide and ensuring that everyone has equal access to financial services.”
The adoption of digital wallets in Africa has been spurred by the region’s high mobile-phone penetration rate. According to the GSMA, sub-Saharan Africa boasts over 477 million unique mobile subscribers, providing a solid foundation for the widespread adoption of digital financial services. With the decline of traditional banking services and the exponential growth of mobile banking, digital options have become the preferred choice for millions across the continent. Amid the uncertainties of the pandemic, the world witnessed a remarkable shift towards digital money management solutions, with digital wallets serving as a vital component.
Digital wallets have a particular role to play in empowering women and combating gender inequality. In GSMA’s 2022 Consumer Survey, over half of female mobile money users in developing nations reported that mobile money “helps them better manage their finances and everyday affairs, such as shopping and paying bills.” In all survey countries, most female respondents reported that mobile money helps save them time.
Digital wallets also have the potential to empower small businesses through improved efficiency, expanded access to capital, and enhanced economic growth. With low-to-no transaction costs, mobile money provides a way for small businesses, particularly those in underserved areas, to access formal financial services without overheads. It enables them to participate in the digital economy, establish financial identities, and gain access to savings, credit, and insurance services and reduces the risk associated with dealing in cash.
Holden concluded, “Digital wallets are a low-cost, convenient, safe and secure alternative to traditional banks, and are tailor-made for those previously excluded from traditional financial services. The growth in the use of these services across Africa has proven their value, and it’s a trend which we only expect to accelerate in the future.”