How Privacy In Payments Encourages More Online Activity In Africa

In Summary

• Africa has a promising population and the potential to have a more thriving online space
• Protecting consumers’ privacy can stimulate activity by earning trust, both within and outside of Africa
• Technologies like blockchain and zero-knowledge proofs may contribute to this 

One of the biggest conversations in the financial space within Africa is how to push for more activity. After all, the continent has one of the biggest populations under 30 and is considered one of the next big financial Frontiers. But to reach its full potential, more financial engagement and inclusion have to be achieved.

While there are many moving parts to all of this, ensuring privacy for consumers is a major step in the right direction. This is because, as many experts suggest, offering more privacy can be a way to supercharge the African financial space.

Deep Dive

When we're spending money, especially in the digital space, privacy is often on our minds. Because of scandals like Cambridge Analytica and the like, we’re very much aware of how major companies can and often do misuse our data. This is especially true when it comes to financial data because we worry about theft.

Recently, there's been a wave of privacy-preserving products and services, many of which leverage novel technology. Take blockchain, which is the underlying technology behind cryptocurrency. Many Industries that leverage blockchain are now able to offer more privacy-preserving services to customers. Take the world of gambling, for example. Typically, customers would have to provide their government ID, address, and other sensitive information. 

But using blockchain technology, casinos now allow people to place wagers without even having to sign up. As gambling expert Carlos De Lanuza explains, quick sign up options are now a major priority for many consumers. And even outside of the gambling space, these sorts of privacy-protecting measures can stir up the economy.

How Privacy Empowers Engagement

Many customers within the African financial space will feel more empowered to participate if they feel that their privacy is being protected. Think of something like using a bank card to pay for a product or service online. Older people or newer members to the financial space might feel hesitant to provide their payment details to a platform out of concern that their data may be stolen or otherwise compromised. But if they feel that they are privacy will be protected and these details will not be revealed to any unauthorised parties, they will more likely make such purchases and thus, stimulate online activity.

This also applies to more sensitive purchases such as gambling, personal items, and so on. The cloak of privacy means that people can make purchases that they wish to keep under wraps for whatever reason. Then there is the external engagement that the African financial space can see. 

It is no secret that many foreign websites, merchants, and so on limit or completely exclude Africans from their ecosystem. Certain sites will not allow Africans to make purchases on them, and consumers outside of Africa have faced hurdles making payments to the space due to institutional distrust. More privacy-protecting measures mean that the wider financial world will look at Africa with less distrust. A customer in North America or Europe might feel more comfortable making a purchase from an African merchant if they believe that the details will be safe.

For the African financial space to reach its full potential, businesses within it will need to attract some level of foreign activity and preserving privacy is a way to gain the trust of this external market. 

Ironically, privacy within payments can also create a safe space for consumers to share more information with various merchants. When they feel that they are being protected in terms of their data, they might feel more open to sharing feedback with merchants, participating in various online communities, and so on. As the word spreads of the positive experience that current users are having with these various platforms, other consumers might feel empowered to do the same.

We've already seen this with the blockchain space and how so many consumers engage with all minor or financial and non-financial services because they can enjoy privacy. If this is applied on a wider scale to the African Market, it could reach heights of growth never before considered and offer a more positive experience to both the merchants and the consumers within it.