Kenya and South Africa are advancing towards cashless economies, with projections indicating that Kenya will run out of cash machines in 28 years and South Africa in 32. Factors such as high mobile penetration and successful mobile money systems like M-Pesa drive this transition. However, challenges like financial exclusion remain significant.
Kenya and South Africa are making significant strides toward achieving cashless economies through the adoption of digital payment systems and mobile money. Kenya is projected to exhaust the availability of cash machines within the next 28 years, while South Africa is estimated to follow suit in 32 years. The advancement towards cashless transactions in these nations is indicative of a broader global trend towards digitization.
Kenya has been a pioneer in Africa’s digital payments landscape, benefitting from a high penetration rate of mobile phones and a growing banked population. These developments are primarily driven by the success of M-Pesa, which transformed mobile money upon its launch in 2007, facilitating seamless financial transactions.
South Africa is also on a path towards decreasing its reliance on cash, bolstered by governmental initiatives promoting electronic payments. Despite facing a significant unbanked population, research indicates that 95% of South Africans have engaged in at least one digital payment, highlighting the rapid acceptance of these payment methods.
The global shift away from cash is not only limited to Africa, as decreasing availability of ATMs around the world suggests a general movement towards digital transactions. A recent study by Merchant Machine, leveraging World Bank data, projected that Norway would become the first fully cashless country within 11 years, while Kenya and South Africa are also progressing rapidly in this direction.
Nevertheless, challenges remain in the transition to a fully cashless environment, including issues of financial exclusion and the risk of service downtimes, which could hinder the realization of a completely cashless economy in these countries.
In conclusion, Kenya and South Africa are leading the transition towards cashless economies through digital payment systems and mobile money innovations. With projections indicating a complete depletion of cash machines in these countries in the coming decades, both nations are well-positioned for further advancements in digital financial services, despite encountering challenges such as financial exclusion and potential service interruptions.
Original Source: africa.businessinsider.com
