Contactless Payments on the Rise: Should Businesses be Worried?
In recent years, the convenience of contactless payments has propelled this technology into the mainstream, making it a preferred choice for consumers globally. Africa is no exception, with the continent witnessing a fairly rapid adoption of contactless payments, particularly in regions where mobile money services are already well-established. However, as with any new technology, the rise of contactless payments has also opened new avenues for fraud. For businesses operating in Africa, understanding and mitigating these risks is crucial to maintaining consumer trust and ensuring the security of financial transactions.
The Surge in Contactless Payments
The adoption of contactless payments in Africa has surged in response to the COVID-19 pandemic, which accelerated the shift towards cashless transactions. According to a report by Visa, nearly half of all card-present transactions in Sub-Saharan Africa are now contactless payments. Visa has upped its efforts with contactless in Botswana, South Africa and Kenya. The ease of transfers or tapping a card/ smartphone to make a payment has driven consumer adoption, with an increasing number of merchants accepting contactless payments in the regions.
Data from the GSM Association reveals significant growth in Africa's mobile money landscape in 2023. Registered mobile money accounts surged by 19%, reaching 835 million. Monthly active accounts also saw a 12% increase, totaling 234 million. The number of transactions skyrocketed to 62 billion, marking a 28% rise, with their combined value reaching $912 billion, a 12% increase. The GSMA reports that there are now 156 active mobile money services across the continent.
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The Growing Fraud Threat
While the convenience of contactless payments is undeniable, it has also become a target for fraudsters...
Learn more about these growing fraud trends, the key risks associated with contactless payments and how to mitigate them by checking out the full issue here.
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