New Year, new payroll trends!
E-wallets have been picking up speed for some time now, especially in Africa. Caught in between these hyper-modern digital payment solutions and a traditional cash system, the financial playground in Africa is interesting to say the least.
But while the cash system is well-documented and well-understood, one can’t say the same about e-wallets.
Where do they feature in the African financial landscape?
How do they work, who do they benefit, and are they the future of payroll?
We answer these questions and more in this article.
Digital wallets and e-wallets refer to the same concept. They are applications or programs that store a person or a company’s private payment information and passwords in cloud storage.
Digital or e-wallets are accessible via all types of devices: desktops, tablets, mobile phones and more. The term mobile wallets, however, specifically refers to e-wallets used on mobile devices. Mobile wallets tend to be some of the most common ways to use e-wallets.
With the help of software, a digital wallet can connect your bank account and payment information to the merchant whom you are paying.
Different applications provide different kinds of access; for example, open wallets (which are accepted by most stores) allow refunds, contactless in-store purchases, and internet purchases. Some apps even let you take out money from certain ATMs.
Some purchases can only be made with the wallet’s issuing merchant, a select group of sellers, or both with semi-closed and closed wallets.
With your payment information in storage and accessible everywhere with an internet connection, the need (and associated risks) to carry credit cards is significantly reduced.
Some of the most popular digital wallet services were created by software and hardware giants, giving rise to applications like Apple Pay, Google Pay, and Samsung Pay. But other digital wallet services are also thriving, with some existing for over a decade. Such players include Venmo, Cash App, Dwolla, Zelle and Paypal.
But the adoption of these services also depends on how well-accepted and catered for they are within a specific region.
A two-way effort is needed in that sense because you cannot make e-wallet payments to a merchant who does not have the infrastructure or technology to accept them.
Doubts about safety and confidentiality when using digital wallets are very common.
After all, there are so many scenarios in which technology like this could go wrong. For instance, what if someone steals your phone? How easy would it be for hackers to take your data? Will you then risk losing your money?
Since mobile payment methods are digitally tokenized and highly encrypted, your card information and account number are not saved in the digital wallet.
Your personal data is, in fact, encrypted and transformed into an individual code that can only be viewed by trusted parties once you add it to a digital wallet.
As such, not only are digital wallets not unsafe, they are actually safer than the alternative.
E-wallet payments process faster when compared to traditional banking.
Why is that?
Because local payments are cleared more efficiently when using non-traditional routes. For businesses with rapid turnaround times or that require time-sensitive payment solutions, this kind of speed and efficiency gain can be a true game-changer.
Available on desktops, mobile devices and tablets, e-wallet application often offer easy-to-follow, user-friendly interfaces, simplifying the often complex process of payment. These applications are self-service ones, which means everyone can use them and there is no need for advanced training.
However, this is only applicable for individuals. As with everything else, matters do get a little more complicated when it comes to business transactions.
With e-wallets, fees tend to be on the lower side when compared to traditional banking. This cost saving is a considerable motivating factor to move towards e-payments when it comes to payroll.
Making international payments can be easier with e-wallets, as payments don’t go through as many processes as they do within a traditional banking system. As a result, currency conversion costs also go down.
E-Wallets are becoming more and more popular, but not all retailers are yet willing to accept them. The effectiveness of your digital wallet may be limited by stores and companies who do not accept digital payments.
Digital wallets may be impacted by technical problems including device malfunctions, network outages, or software errors. It can be annoying when these problems make it hard to use your digital wallet or make payments.
Because they have great faith in bank-level security, including data protection, most companies use banks for their financial transactions. However, e-wallets also include the same improved security measures that reduce the likelihood of hackers and information violations, like sophisticated encryption and fraud detection. Some also include multi-factor authentication capabilities, which add an extra degree of protection for companies handling extremely private or sensitive data like payroll.
As technology shifts and market penetration of e-wallets grows, a future where payroll in Africa is processed through e-wallets may not be so distant…
Whether payments are made via bank transfer or e-wallet payments, the prerequisites of a good payroll system are the same: accurate calculations, timely processing, and compliance with local legislation. Africa HR Solutions will help you have a seamless payroll system.
Grant Geraghty is the longest-serving member of the Africa HR team. This resident subject matter expert and client champion is responsible for gaining a deep understanding of our clients’ unique HR needs in Africa and providing tailored solutions that align with their business objectives. Grant collaborates closely with our clients to ensure that their requirements are properly implemented, providing ongoing support and guidance throughout the process.
Grant brings a wealth of experience to his role, having served as Africa HR’s longest-serving employee. He holds a Bachelor of Commerce degree, with a major in Economics and Business Finance, from the University of Natal in South Africa. Additionally, he has completed a certification program in Payroll and Tax Administration from the University of Cape Town, further enhancing his expertise in HR operations and compliance.
His commitment to delivering exceptional service and his extensive knowledge of HR in Africa make him an invaluable member of the Africa HR team.
Kevina Takoordyal has a BA Hons Business Management from the University of Glamorgan, UK, with MBA in leadership and Innovation, MBA General, PMP Certified, and Agile Scrum Master. She currently works as the Head of Operations at Africa HR Solutions Ltd with more than 20 years of proven leadership capabilities in Operations, Business Development, People Management, Process Optimization, and Project Management in the Financial Services, BPO, Banking Industry, and Heath Care Industry. In Senior leadership roles with an international footprint across Europe working and extensive Pan- African experience from a compliance, finance, and operations angle, Kevina comes across with a panoply of cross-functional skills. Kevina also serves on a few Boards, Non-Independent Executive at MioD and for NGOs on a voluntary basis, a coach and mentor to aspiring female leaders across Africa and Mauritius.
Kevina is a firm believer in Servant Leadership with a strong focus and commitment to uplifting others, with the ability to deliver through a highly engaged – diverse team, and works towards consistently synergistic value creation. While being a focused and adaptive thinker and Kevina is actively participating in panel discussions on Innovation, CX, Digital transformation.
Kevina serves as Project Assessor for the National Youth upskilling program. She has been recognized as Global Talent in a few companies, Ceridian, and International SOS Ltd whereby she has been awarded a few scholarships and had the opportunity to be mentored by Senior Vice President in the US. Award Winner in various fields and at a national level and recognized including Super Achiever Leader Award in Africa in 2016, Awarded Africa Women Leader 2018.
Viloshna is an experienced finance professional with 18 years of expertise in strategic financial planning, financial analysis, cash flow management, systems and controls implementation, financial reporting, and continuous process improvements. She currently serves as Head of Finance & Business Support, where she has successfully automated and leveraged the financial reporting system capabilities to ensure efficient company operations.
Viloshna’s background includes senior roles in a multinational pharmaceutical company and a large listed Mauritian conglomerate. Her meticulous attention to detail and strategic thinking have streamlined financial processes, making her a valuable addition to any finance team. Viloshna is a qualified finance professional with an FCCA qualification and an MBA, bringing valuable expertise to any organization.
In her current role, Viloshna leads the company’s Treasury and Payments function, including the fulfillment of the company’s cross-border payments into Africa. With her strong educational background and extensive experience, Viloshna consistently demonstrates her ability to optimize financial operations, minimize risks, and improve profitability. Her expertise in financial reporting and process improvements make her a valuable asset to any organization.
A qualified lawyer who joined Africa HR Solutions in July 2020, Mark Du Preez has experience working in private practice for a reputable law firm in South Africa. He also played commercially focused roles at a leading private bank, wealth management company, and outsourcing firm in South Africa and Mauritius.
Mark has played a pivotal role in Africa HR Solution’s risk mitigation strategy, which positively impacted P&L performance over the years.
He currently leads the Partnerships function of the company including relationships and oversight with in-country partners (ICPs) across Africa.
Alex has more than 15 years of experience in the global, strategic development of both enterprise and consumer brands in categories including technology, transport, enterprise software, entertainment, and travel.
With experience in roles on both agency and corporate side, he has worked across international brands and has led the development and execution of multi-discipline campaigns across EMEA, NORAM and Asia Pacific.
His focus is on driving meaningful business impact through brand differentiation and building high-functioning, digitally oriented, and analytically driven capabilities. He is motivated by working with, and developing dynamic people, teams, and organizations.
He leads, manages, develops and mentors the Key Account Management department, including line management responsibility for the team of Key Account Managers and Key Account Administrator who represent the Company as the primary communication link between all relevant stakeholders, including clients, third party in-country partners and internal functions.
Originally from Mauritius, he holds bachelor’s degrees in International Business, Finance and Management from the University of Nevada, Reno.