Mastercard study predicts massive fintech, e-commerce disruption in 2021 for Africa

A new study by the Mastercard Economics Institute says the COVID-19 pandemic has presented Africa with massive growth opportunities in fintech and e-commerce sectors with the expectation that these sectors will, this year, play a catalytic role in boosting financial inclusion on the continent.

The study, Economy 2021 is a global outlook report providing detailed analysis of the economic impact of COVID-19 including permanent changes in digital consumer spending habits, growth of online banking, fintech disruption and opportunities to boost financial inclusion.

According to the report, the pandemic is the biggest opportunity for fintech firms to provide banking solutions that solve financial inclusion challenges on the continent as the need to bring the population into the digital economy through fintech solutions has become paramount.


The report also adds that as digital innovation improves and Internet access increases, digital payment solutions offer more possibilities than ever before as there are growing concerns of contracting COVID-19 from visiting bank branches and using hard currency.

E-commerce here to stay


Moving to e-commerce, the Economy 2021 report estimates a permanent stickiness factor of 20% – 30% in overall retail spending, a key consideration as businesses contemplate scaling up their digital transformation efforts.

According to the study, this trend appears to be here to stay, as 71% of respondents said they would continue to shop online post-COVID-19.

Economy 2021 also noted that as e-commerce rapidly becomes a way to pandemic-proof a business, older generations’ adoption and added convenience and lower costs for consumers will contribute to the continued growth of digital demand in 2021.

“This growth of the digital economy represents a ‘coming of age’ for e-commerce, a turning point in bridging the digital divide. We are heading for a multi-speed global recovery that favours low-touch over high-touch,” says David Mann, chief economist for Asia and MEA at Mastercard.

“Small businesses and micro-merchants are especially crucial to the region’s economies, and by enabling them to accept digital payments, we can connect more people and communities to financial freedom and eventual prosperity.”

Digitalisation in Africa is key to advancing financial inclusion.

Within the scope of accelerated digital transformation, the Economy 2021 notes that continued digitalisation in the Middle East and Africa (MEA) is key to advancing financial inclusion.

According to the study, this is especially relevant in regions such as East Africa, where the International Monetary Fund (IMF) research found that even where financial inclusion through traditional banking services was declining, expanded access to digital tools and services increased financial inclusion.


“This trend is set to continue in 2021, especially in the more digitally-advanced economies such as Ghana, Kenya and Uganda,” says Mastercard.

The Mastercard e-commerce study also noted that brick-and-mortar business creation is expected to decline further in 2021 in favour of online business creation and the adoption of initiatives that connect a merchant’s sales data with access to capital.

“We recognise the overwhelming pressure that small business owners are currently facing and are committed to supporting them through COVID-19 and beyond as they adapt to a new way of operating and evolved customer needs. This is why we have collaborated with Standard Bank, and Google to help small business owners move their operations online, accept digital payments and attract more customers,” says Suzanne Morel, Country Manager, Mastercard, South Africa.

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