Mobile Payment Technology and Startups in Africa


One of the major driving forces of entrepreneurial growth in Africa is the increasing popularity of mobile payment systems. In this industry, the startup MFS Africa stands out for its focus on transnational transactions. The platform, which was founded in 2009 in Johannesburg, has since expanded to 30 employees in 17 African nations and boasts contracts with many of the biggest telecommunications operators on the continent. This large footprint helps it connect more than 55 million users with convenient and secure money transfer options.

The MFS Africa platform does not require a smartphone, which is key in regions where more basic devices predominate. To use the service, individuals simply set up an account with their mobile device operator. Current operator partners include Vodafone Group PLC subsidiaries, Bharti Airtel Ltd., and MTN Group Ltd., as well as many others. To send money, users simply text a money order to another phone number that has an account with a supported carrier and then confirm the transaction with a special code. The platform also supports money transfers between mobile phones and certain brick-and-mortar establishments.

A Growing Need for Mobile Payments

A year ago, MFS Africa had about 20 million users. That number now exceeds 55 million individuals. Within another six months, the company projects that it will have 100 million subscribers. This growth is largely attributed to the needs of migrant workers across the continent who send money home using the service, which is cheaper and more convenient than other options. Some major companies have also taken note of this trend. Recently, Visa Inc. purchased the Kenyan mobile finance startup Fundamo to boost its ability to enter new markets, like Rwanda. Likewise, MasterCard Inc., eServGlobal Ltd., and BICS launched HomeSend, a global payment hub.

Entrepreneurship and mobile payments have a symbiotic relationship. While startups are driving the increasing availability of mobile payments platforms across the continent, these secure systems make payments easier and safer for entrepreneurs. Before the advent of this technology, entrepreneurs would have to carry large amounts of cash on their person, which increased the chances of being robbed. With secure mobile payments, money can flow electronically between businesses and their customers, thereby reducing personal risk.

Platforms like MFS Africa also have implications for the future of government operations. Some have even suggested that its PIN-protected system could be used as a voting system in sub-Saharan countries.

man in suit

Other Startups Driving the Mobile Payment Revolution

Outside of MFS Africa, several other fledgling mobile payment technology companies have emerged. While M-PESA, which began in Kenya, was the main pioneer of this technology, the following five companies have also made waves in the mobile payment industry:

Shield Finance

Based in Kenya, Shield Finance has created a proprietary platform aimed at underbanked employees who need affordable salary advances. Through Shield Finance, individuals can apply for and receive these advances using only their phones. Recently, the company came in first at the DEMO Africa pre-pitch event in Nairobi and then went on to the main event in Lagos. Shield Finance also won at the PIVOT East mobile startup pitch competition. The company has secured financing from a local angel investor and is actively looking for new investors as it begins to scale.


A South African startup, SnapScan facilitates sales through the use of unique quick response (QR) codes, branded as SnapCodes. Individuals can scan the code at the point of sale and then enter the payment amount before confirming with a PIN. The company has grown quickly largely through strategic partnerships. For example, the company has signed deals with WumDrop, a courier service; PriceCheck, which allows mobile ordering from offline catalogues; and the City of Cape Town, which employs SnapScan as a way of paying for parking charges.


Also a South African startup, Wallettec integrates mobile wallet systems from third parties for use at point of sale. The single application provides a platform for paying for products and services through mobile phones. So far, the company has integrated with Bitcoin, Kopo Kopo, Payza, SnapSacan, WalletOne, Airtel Money, and M-PESA.


The Nigerian company IroFit works with partners in Finland to offer a mobile application and EMV-certified card reader for small business to accept card payments. Because the product is tailored for the needs of small business owners, it also provides variety sales analytics, loyalty management, inventory, and payroll services. The proprietary technology works even in areas without an Internet connection. Last year, IroFit received a major investment to bring its product to market in Nigeria.


Another Nigerian startup, Paga recently received a $13 million round of Series B funding. The company provides a platform for sending money to any phone number. The recipient can redeem the transaction for cash at ATMs or through a Paga agent. The software also permits deposits to Nigerian bank accounts and facilitates bill paying and mobile phone top-ups.