Mambo! Here is John 👋
Cards power more than 50% of payments in developed markets. In Africa, they never really worked.
Only about 3% of Africans have credit cards. Debit cards are growing, but mostly for withdrawals, not payments. In Tanzania, you can meet a primary school teacher with three cards that she has used for years only to withdraw salary at an ATM. Never POS, Nor online.
Africa has never been a single behavioral market
In Kenya, M-Pesa processes tens of millions of transactions every day and accounts for about 94% of payments, while cards sit around 6%. Uber even dropped Visa in Kenya citing cost. If cards were working well, they would not have dropped them.
But go to Nigeria and you see something else. Interswitch has issued over 100 million cards through Verve. Same continent, different behavior.
Cards struggled in Africa for reasons that have nothing to do with demand. Low bank penetration, expensive FX, unreliable international payments, and infrastructure built for other markets. Africa did not reject digital payments. It built its own system through mobile money.
Now something new is happening
Stablecoins are entering the card layer.
Flutterwave partnered with Kulipa. Kredete partnered with Visa. These are not just new cards. This is a different way of funding cards.
The biggest shift is the currency.
A stablecoin card starts with dollars. That removes the usual path of local currency going through FX before a payment is completed. Anyone who has tried to pay an international supplier from mobile money or a local bank already knows how painful that conversion can be. Either you accept bad rates from telecom’s mobile money platforms or you need strong banking relationships to access dollars at good(not best) FX rate. Most small businesses do not have that.
Stablecoins change that part.
They also reduce the prefunding problem. Traditional systems require money to sit in different places before transactions can happen. Stablecoins allow value to move when it is needed. That opens the door for smaller players who could not afford that setup before.
But one problem is still sitting there; On-ramping
How do you move from local currency into stablecoins cheaply and reliably? Until that is solved, these cards will not reach the majority of users.
There is also the question of cost. Stablecoins are known for being cheaper, but as they integrate with players like Visa and Mastercard, costs may come back in different ways. We have not seen where that settles yet.
So will stablecoin cards succeed where traditional cards struggled?
Cards did not fail in Africa because people did not want to pay digitally. They failed because the money behind them did not work for this market.
Stablecoin cards are not fixing cards.
They are fixing the money behind the card.
Written from Inside Africa With Love 🇹🇿💚