From Dublin to Dakar
The electronic CFA franc (eCFA) will struggle in the absence of a thriving ecosystem, according to industry experts interviewed by FrancTrade.com. This follows an announcement today by the Senegal-based Banque Régionale de Marchés (BRM), that it is partnering with the Dublin-based eCurrency Mint Limited (eCM) to provide a digital currency in West Africa.
According to industry reports, BRM will issue the eCFA “in compliance with e-money regulations of the [West African Central Bank]”. The eCFA will be transacted across all existing payment platforms and will be equivalent in value to physical legal tender. The eCFA distribution will begin in Senegal and will be extended in a second phase to Cote d’Ivoire, Benin, Burkina Faso, Mali, Niger, Togo and Guinea-Bissau.
But who will bell the cat?
Both the BRM and eCM underline safety, security, interoperability between all e-money payment systems and the promotion of financial inclusion as being the main benefits of the eCFA. These are laudable objectives given that over 75% of the population in sub Saharan Africa is unbanked.
But according to Ms Nadine Ebelle Kotto, Founder and CEO of mobile money solutions, MQASH, the distribution infrastructure supporting electronic payments in West Africa remains weak and could undermine the success of the eCFA. “Even if we have a multitude of providers who are attracted to the sector, businesses still don’t understand the importance of assimilating digital payments into existing systems” she says. Ms Ebelle Kotto believes that stronger business partnerships between electronic money operators and financial institutions could indeed help digital platforms bridge the gap in the current infrastructure.
This is a view shared by telecommunications expert Mr Anye Chendi, who argues that in contrast to the east African market, digital wallet holders in francophone Africa are still inclined to revert to physical cash, which runs contrary to its core principles. “The disadvantage is that people always come back to paper money, whereas they will need to get comfortable saving and transacting in eCFA” he adds.
Opportunities for regional players
And while Franctrade.com believes that the intervention of robust regional financial institutions could facilitate cross border transactions and help boost intraregional trade, there is now a pressing need, and therefore opportunities, for more integrated digital platforms. These include point of sales systems that facilitate the trade and services sector in the region. The recent MOU signed between Ecobank and Mastercard to roll out Masterpass QR mobile payments across 33 African countries by the end of the year, is only part of the solution.
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