Premier Bank, a leading financial institution in Somalia, has partnered with Mastercard and Tappy Technologies to unveil Tap2Pay, a groundbreaking payment solution designed to enhance the payment experience for consumers in Somalia. This innovative service leverages near-field communication (NFC) technology to embed payment capabilities into everyday accessories like eyeglasses, rings, wristbands, smartwatch straps, and phone cases, allowing users to make payments effortlessly by tapping their wearable device on any compatible point-of-sale (POS) terminal, ATM, or NFC-enabled payment point.
This initiative positions Premier Bank as the pioneering Somali bank to introduce tokenized-passive payment wearables in Africa, marking a significant milestone in the adoption of digital payments, fostering financial inclusion, and contributing to the continent’s shift towards a more digitized and interconnected future. The global market for wearable payment devices, valued at $47.1 billion in 2021, is anticipated to surge to $158.8 billion by 2031, growing at a compound annual growth rate (CAGR) of 13.3% from 2022 to 2031.
Suboor Ahmed, Chief Operating Officer at Tappy Technologies, highlighted the growing demand for convenient payment solutions in Africa, driven by the continent’s rapid embrace of digital technologies. He pointed out that wearable payment technology is well-positioned to meet this demand and unlock significant potential.
Mark Elliott, Division President for Africa at Mastercard, underscored the importance of tokenization in advancing the next generation of secure, contactless payments. Tokenization enhances security by replacing sensitive card information with encrypted tokens, thereby enabling consumers to conduct transactions with greater confidence.
The adoption of tokenization not only bolsters security but also streamlines the payment process for consumers and merchants alike, leading to quicker checkouts, improved customer satisfaction, and increased sales. For financial institutions, it promotes customer loyalty by offering a secure and innovative payment method that encourages more transactions.
In a related development, Somali telecommunications and mobile money operator Hormuud Telecom has forged two new banking partnerships to improve interoperability with its mobile money service, EVC Plus. EVC Plus stands as Somalia’s largest mobile money platform, with over 70% of the population holding a mobile money account compared to approximately 15% with traditional bank accounts.
Somalia’s fintech landscape has experienced rapid growth, driven by mobile money innovations. The country’s central bank reports that over 650 million mobile money transactions are processed annually, amounting to $8 billion.
These advancements are underpinned by the National Payment System (NPS) introduced by the Central Bank in 2021, which encompasses electronic payments, clearing, and settlement systems. The NPS enables the central bank to execute open market operations and implement monetary policy effectively, further bolstering Somalia’s financial infrastructure and digital economy.
