In a surprise move this past week, Amazon announced that it will be dropping Visa cards as a payment option for its operations in the UK. The international e-commerce giant made it very clear that excessive card fees continued to be an obstacle for businesses striving to provide the best prices for customers.
More importantly, it’s been a deliberate step by the online retailer to drive open banking on its platform. Going forward, bank-to-bank payments will be the primary way for people to transact on Amazon.
Thomas Pays, CEO and co-founder of Ozow, explains that Africa often follows international trends. “We’re excited about what this means for the future of e-commerce on the continent. We expect to see that many businesses in the local market will follow the move by Amazon.”
Understanding the importance of reducing barriers to access, Pays says that Ozow is already seeing its merchants prioritising alternative payment options, which are significantly cheaper and allow them to reach a wider net of consumers.
He points out that the rapid adoption of digital payment solutions is helping to create greater access to millions of bank account holders. “These are cheaper, easier to use and allow for a more seamless checkout process.”
“As they become more ubiquitous, we’re also expecting transaction volumes to increase as more people turn to them as the preferred payment method. More importantly, this is critical to ensure that a more financially inclusive environment is created in Africa,” adds Pays.
“The most effective way of reducing people’s reliance on cash in informal markets is through the development of simple, affordable, and secure alternative payment options. Doing so can help bring more the 370 million Sub-Saharan Africans into the digital economy,” says Pays.