Somali bank launches first NFC wearable payment solution to accelerate financial inclusion

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October 18, 2024
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2 min read
Somali Premier Bank's building
  • Premier Bank, a Somali bank, has launched Tap2Pay in collaboration with Mastercard and Tappy Technologies to improve the consumer experience, provide secure and frictionless payments, and promote financial inclusion in Somalia.
  • Tap2Pay wearables integrate near-field communication (NFC) technology into everyday accessories such as eyeglasses, rings, wristbands, smartwatch straps, and phone cases. These devices enable consumers to make quick, secure payments by tapping their wearable at any compatible point-of-sale (POS) terminal, ATM, or NFC-enabled payment point. 
  • This development makes Premier Bank the first Somali bank in Africa to introduce tokenised-passive payment wearables, accelerating digital payment adoption driving financial inclusion, and contributing to Africa's transition to a more digitised and connected future.

The global Wearable Payment Devices Market was valued at $47.1 billion in 2021 and is projected to reach $158.8 billion by 2031, with a compound annual growth rate (CAGR) of 13.3% from 2022 to 2031.

Suboor Ahmed, Chief Operating Officer at Tappy Technologies, noted that Africa's growing adoption of digital technologies and rising demand for convenient payment solutions present the opportunity for wearable payment technology to meet this demand and unlock its vast potential.

Mark Elliott, Division President for Africa at Mastercard, emphasised that tokenisation is central to the next generation of secure, contactless payments. By replacing sensitive data with encrypted tokens, it allows consumers to make payments with confidence.

Tokenisation provides robust security by substituting card details with encrypted tokens, offering convenience for consumers and enabling faster checkouts for merchants. This approach enhances customer satisfaction, efficiency, and sales. For financial institutions, it fosters customer loyalty by facilitating more transactions through a secure and dynamic payment method.

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As part of this growth, Somali telco and mobile money operator Hormuud Telecom announced two new banking partnerships to enhance interoperability with its mobile money offering, EVC Plus.

According to local data, the EVC Plus is Somalia's largest mobile money platform, with over 70% of Somalis having a mobile money account and only about 15% having a traditional bank account.

Somalia's fintech ecosystem has expanded rapidly, fuelled by mobile money innovations. According to the central bank, the country processes over 650 million mobile money transactions yearly, totalling $8 billion.

The innovations the country is currently witnessing are built on the National Payment System (NPS) launched by the Central Bank in 2021. This system includes electronic payments, clearing, and settlement systems, enabling the central bank to conduct open market operations and transmit monetary policy. 

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