By Dakshesh Patel
With 40.5% of its GDP in the informal sector, Africa has the highest rate of the shadow economy, according to the World Bank. By comparison, the figure is 16% for countries in the OECD. “Payments provided via an account can provide the on-ramp to financial inclusion,” maintains the World Bank.
An International payments business has developed solutions to drive real time payment services bridging the ecosystem between, financial institutions, service providers and consumers in a seamless way. A purposeful way to pay for services direct such as utilities, school fees and groceries.
Healthcare and related services are now a reality to support three fundamental principles of convenience, control and cost. An example is education. The pain of having to remit money to a ‘middleman’, travel to get cash, go pay school fees at a bank and then take receipt to school as evidence of payment is a thing of the past.
A service has been developed in Zimbabwe and partnered with a Major Bank to connect 70% of state schools to its platform. Now you can make direct payments in real time to school accounts from anywhere in the world. Electronic receipting/validation into the school account removes the need for this cumbersome process. Joining forces with the suppliers of catering products to schools, we enabled the flow of FX to such partners and in return the schools received up to 60% of their fees as a gift to pay for groceries and catering products.
This reduces burden of state budgets and ensures that children are getting food. This joining of the core ecosystem around the Education sector is an example of the impact of smart payment solutions, making the difference for the unbanked and drives financial inclusion through innovation.