A report by Mastercard reveals that African countries are fertile ground for the growth of super-apps A super app is a mobile application that provides multiple services, including payments and financial transaction processing The report noted that the prevalence of low-end mobile phones and high internet costs in the region makes super-apps an attractive product
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African countries, including Kenya, are fertile ground for the growth of super-apps, a new report by Mastercard has found. M-PESA App on display. A super app is a mobile application that provides multiple services, including payments and financial transaction processing.
Super apps in Kenya include the new M-PESA app. The report titled ‘From online bazaar to one-stop-shop: The rise of super-apps in the Middle East and Africa’ finds that locally active super-apps proliferate across the Middle East and Africa region, but more prominent cross-regional players remain few.
Internet cost: The report noted that the prevalence of low-end mobile phones and high internet costs in the MEA makes super-apps an attractive product.
For instance, firms such as Uber have emerged as local champions, expanding from ride-hailing to restaurant delivery. At the same time, the acquisition sums for regional apps – from US$500 million of iFood to over US$3 billion of Careem, all suggest a valuable market.
The paper also finds that super-apps offer a single location where consumers can engage in various commercial transactions, from calling a cab to paying an electricity bill. They have also emerged as a business model with great potential to dominate the digital services industry. According to the report, the region has historically had the lowest levels of connectivity and high fixed-line broadband costs. Mobile operators have provided the region with affordable low-end smartphones.
In many countries, the advent of cheap smartphones has allowed populations to leapfrog desktop technology and adopt mobile apps as their first digital device. The report notes that super-apps offer an all-in-one platform that requires less bandwidth and data to operate to cater to this market. “Super-apps can be drivers for financial inclusion in the Middle East and Africa region,” the report observed. For people living in remote parts of the region with poor technological infrastructure, the report notes that this offers an opportunity for greater digital inclusion. “In remote areas where a lack of traditional bank branches has contributed to scant financial service provision, super-apps enable previously unbanked people to do financial transactions and become part of a wider financial ecosystem,” it notes.
National policies
On the downside, however, the harmonization of national policies remains the biggest challenge to the scaling-up of super-app presence in the region.
The Middle East and Africa region consist of more than 60 countries with over 1,000 languages and divergent economic, policy and cultural environments. The report observes that although the African Union and Gulf Cooperation Council are fostering the harmonization of industrial and data policies for super-apps seeking to further their reach, the current fragmentation presents a significant operational, legal and financial burden.
The paper sought to examine how population growth, digital access, connectivity, a diverse demographic, increasing trust, and affordability contribute to the rapid progress of super-apps in the region. Ngozi Megwa, Senior Vice President, Digital Partnerships, Middle East and Africa, said that the region’s expanded market presents a wealth of customer data, which regional players could leverage to add value for all stakeholders. According to Ngozi, the Middle East and Africa region is projected to become the most populated area globally, with a forecast population of 3.4 billion by 2050.
“Mastercard, with its digital-first approach, can be that single technology provider of choice to connect diverse players such as telcos, digital e-tailers and fintech to become super-apps by providing technology solutions, platforms and propositions that enable a superior digital experience and drive greater inclusion for people across MEA,” said Ngozi.
