Digital payment in Africa still faces significant challenges that hold back its developing and growth, according to new research by Network International Holdings Plc, a technology-enabled payments solutions holding company which focuses on the Middle East and Africa markets.

The challenges, according the research paper titled 'Payment Acceptance in Africa, the Emerging Unseen Opportunity,' include low income levels and poor infrastructure.

However, the study highlighted that the region still has some considerable advantages. While the rest of the world population is in the older age range, the average age of the population of Africa is only 19 (compared, for instance, with Europe at 42). African youth are gradually engaged in various ways with financial products, eager to track down the use of electronic payment services, the report added.

"This trend has been widely commented on, but these changes are now translating into hard numbers with a 36 percent increase in bank account holders over a three-year period," the report noted.

"Our best estimate at Network is that spend processed through Africa’s Card Points of Sale (POS) environment totals approximately $100 billion. That accounts to around 5 percent of the continent’s GDP compared to over 30 percent for more developed markets. South Africa is often atypical to conditions found more generally in Africa. Card Acceptance is more developed there than in other major African economies, which skews statistics for the whole continent. In fact, if we remove the South Africa statistics from the data above, the ratio of card spending to GDP falls to less than 2 percent," the report said.

Otherwise, the research found that despite the current situation, the adoption of all types of electronic payments is now growing faster across Africa than in any other continent. Although the headlines have been dominated by the growth in mobile money, card issuance and acceptance have also been expanding rapidly.

On average, 41 percent of the adult population now has a financial account. Between 2014 and 2017, average growth in POS devices was 26 percent per annum, and the number of transactions per card is growing even faster, averaging 61 percent growth per annum over the same period. South Africa, a more mature market, had transaction growth of 13 percent per annum, while the ratio of POS/card has improved by 8 percent per annum, according to the research findings.

Meanwhile, Managing Director of Africa region at Network International Andrew Key revealed that the amount of money processed through Point of Sale devices remains only 5 percent of GDP in Africa, compared to over 30 percent in some countries.

"Closing this gap offers Africa significant economic development potential. we found also that Africa has a growing untapped opportunity through the rapidly increasing bankability of Africa’s population stemming partly from the region’s digitally engaged customer base and fintech-hungry businesses, in addition to falling hardware costs, sophisticated pricing and more flexible technologies," according to Key.

Dealing with that, the research proposed multiple opportunities for the banking sector to play a greater role in this regard, including transforming the profitability of Payment Acceptance through lower costs, new revenue lines and greater scale, and creating a "halo effect" on the issuing side of the business by creating more usage opportunities and the potential to drive customer loyalty as more merchants equate to more opportunities for the use of issuing products, boosting transaction-driven revenue.

It also suggested feeding the flow of liabilities and hard currency to a bank, transforming how customers transact with their bank and encouraging a deeper engagement with a bank’s brand, supporting the growth of efficient lending to both companies and individuals, moreover, creating a new delivery channel through flexible technology enabling additional services.