In Francophone West Africa, collectively known as the West African Economic and Monetary Union (UEMOA), payment cards are witnessing rapid and unprecedented adoption. A recent report from the Central Bank of West African States (BCEAO) highlights significant advancements in payment card adoption, interbank transactions, and digital payment infrastructure. Yet, unlike other regions where fintechs often dominate the digital card payments space, Francophone West Africa ’s landscape remains bank-led.

As of December 31, 2023, over 8 million payment cards were circulating within the UEMOA region, a 7.9% increase from the previous year. Among these, 6.3 million were tied to bank accounts, reflecting a 5.9% growth, while prepaid cards, often viewed as key to financial inclusion, surged by 16% to 1.6 million, the report notes. 

Interbank transactions have also grown significantly. In 2023, the region processed 21.3 million interbank card transactions valued at over 2 billion CFA francs ($3.3 million). Contactless cards, a relatively new addition to the payment ecosystem, saw notable adoption, with issuance increasing by 15.2% year-over-year to over 1.2 million cards.

“BCEAO data shows that 122 out of 128 members of the GIM-UEMOA network are actively integrated into its platform, demonstrating a growing harmonization of regional financial institutions within the monetics ecosystem,” the report states.

Building Infrastructure

Infrastructure improvements have paralleled the rise in card adoption. The number of ATMs grew modestly, by 2.26%, reaching 4,214 units by the end of 2023. Electronic payment terminals (EFTPOS) expanded more significantly, increasing by 10.46% to 15,259 units.

The COVID-19 pandemic played a catalytic role in accelerating digital payments. In 2023, digital payment transaction volumes surged by 33.78%, while their value increased by 35.82%. The total number of digital transactions reached 79 million, a sharp rise from 47 million in 2022.

Banks Lead, Fintechs Follow

Despite the impressive growth, UEMOA’s financial landscape remains bank-centric. While fintechs have introduced innovative products, including prepaid cards and digital wallets, their role often complements rather than disrupts traditional banking services.

Local fintech startup Djamo exemplifies this dynamic. Founded in 2020 in Côte d’Ivoire, Djamo provides a Visa-powered debit card and a suite of digital banking services. Instead of challenging banks outright, Djamo collaborates with them to issue “local” cards that meet regulatory requirements and align with merchant preferences.

Co-founder Hassan Bourgi highlights the importance of these partnerships:

“We needed to issue ‘local’ cards connected to a local banking institution because most merchants’ fraud algorithms favor locally issued cards. Partnering with a non-local or foreign bank could negatively impact card success rates, harming customer experience,” he explained.

While the BCEAO report underscores the potential for digital transformation, challenges persist. Payment card penetration and digital infrastructure remain uneven across UEMOA countries, limiting the reach of these innovations. Regulatory frameworks must evolve to balance fostering innovation with ensuring stability and consumer protection.

The upward trajectory of digital payments in UEMOA signals a pivotal moment for the region’s financial sector. As banks continue to lead and fintechs innovate within collaborative frameworks, Francophone West Africa could see deeper financial inclusion and greater integration of digital cards into everyday transactions.