The success of the African eCommerce market has been described by McKinsey in one of its quarterly reports as one that has ‘blossomed’.

The research firm pointed out that those global business leaders that don’t understand this potential or this continent run the risk of missing out on one of the greatest growth opportunities of the 21st century.

It is a 1.2-billion-person market that’s sitting on the knife’s edge of explosive growth – a market that has already been successfully harnessed by eCommerce entrepreneurs and mobile solutions such as Jumia, Mall For Africa, PayU and M-Pesa.

“While the growth of eCommerce across the continent has been driven by increased internet penetration, improved economic conditions, and a growing middle-class population, there is another factor pushing eCommerce forward – cross-border engagement,” says Corrie Bakker, Head of Strategy & Business Development, PayU Africa.

“The ability to expand eCommerce operations across borders and into new markets across a diverse and engaging market is playing a significant role in driving growth and investment.”

The McKinsey & Company Global Payments 2018 report emphasises the importance of innovation and change when it comes to the complexities of cross-border payments, as well as the value that they offer to the eCommerce market.

In EMEA, half of the $200 billion of new opportunities will emerge from transaction growth both in-country and across borders. This growth spans both the business to business (B2B) and business to consumer (B2C) markets with cross-border transactions accounting for 5% of payments revenue growth by 2022 in the region.

“If payment solutions can provide both business and consumer with reliable, secure and trusted payment infrastructure, they can capture a significant share of this growing market,” says Bakker. “These figures highlight the potential of the continent and how the risks that are involved in cross-border payment systems need to be addressed in order to further growth and market share.”

Cross-border payments have battled with legacy issues such as a lack of transparency, complex regulation and legalities, system efficiencies and a limited access to reliable and recognisable payment options.

One of the biggest issues highlighted with regards to the B2C cross-border market by the McKinsey report is a lack of access to familiar local payment options on international website plus a limited visibility into
foreign exchange fees. 

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