Digital economy: the future of payments and commerce

Tuesday September 29 2020


By Prudence Glorious

2019 marked a major mobile industry as the number of registered mobile money accounts throughout the world surpassed the one billion mark.

This is a tremendous achievement, given the fact that the industry is just over a decade old. Globally, the last five years have witnessed a gradual shift from cash to digital payments. The ratio of digital to cash-based transactions has also increased by nearly 50 per cent with the larger proportion of money entering and leaving the system in digital form and on varied platforms.

The scale at which digital transactions are growing demonstrates that more people are trusting mobile money platforms, that users are finding the platforms more relevant to their needs and it also showcases the potential of mobile money to digitise an increasing amount of capital.

GSMA forecast that by 2023, over $1 trillion will be transacted via mobile money platforms on an annual basis, translating to over $2.8 billion a day. Given the evidence, it is safe to say that consumers the world over are shifting from cash towards digital payments in their everyday lives — for food purchases, school fees, savings, international remittances, luku payments and buying milk at the mangi corner shop.

Here in Tanzania by September 2020, TCRA published data showcases that the total mobile money accounts in Tanzania stood at 29,659,961 with the total value of mobile money transactions standing at 10,651,723,215,486 TZS.

Since the birth of mobile money in 2008, digital financial service providers have designed and deployed a growing number of services including mobile wallets, international transfers, agency banking, mobile credit, mobile to bank, mobile insurance, mobile savings and government payments. It goes without saying that the potential for digital financial services is significant not only for providers, but particularly for many Tanzanians who are now able to access useful and affordable financial services that meet their needs.


The International Monetary Fund asserts that the realisation of e-commerce has been difficult in many African countries, due to poor infrastructure. Nevertheless, a nexus of opportunity lies at the combination of mobile money systems and the overactive social media.

This relationship presents both a promising future for the exponentially growing industry and a relevant alternative for emerging economies and LDCs.

This type of commerce is referred to as social commerce as it integrates mobile phones and social media to form a new platform for online commerce in these countries.

This new way of trading unlocks new solutions to some of the world’s most intractable development challenges and is a poster kid for the catalytic role that mobile money is playing in achieving the Sustainable Development Goals. The future of digital trade is social commerce.