For the third consecutive year, mobile money remained Zambia’s leading retail payment platform in 2024. However, point-of-sale (POS) transactions saw the fastest growth, outpacing electronic funds transfers (EFTs). According to the Bank of Zambia’s latest payment statistics, mobile money transactions totalled K486.3 billion, reflecting an 8% year-on-year increase. Meanwhile, POS payments surged 30% to K185 billion, surpassing EFTs at K160.76 billion, which registered a 12% growth from the previous year.
This shift underscores Zambians’ accelerating adoption of digital payments. Automated Teller Machine (ATM) transactions rose 6% to K60 billion, signalling a gradual decline in demand for cash withdrawals as consumers increasingly prefer swiping, tapping, and other card-based payment methods. Meanwhile, cheque payments—primarily used by state-owned agencies that have yet to fully embrace digital solutions—contracted 13% to K6.8 billion. Reflecting this trend, the Bank of Zambia recently announced plans to phase out cheques over the next two years, with an extended grace period for transition. Mobile money payments are expected to cross the half a trillion mark in 2025.
Retail Payment Volumes and Transactions See Double-Digit Growth
Total retail payment value climbed 11% to K899 billion, with mobile money accounting for 54% (K486 billion), followed by POS at 21%, EFT at 18%, and the remainder comprising ATM and cheque payments.
Retail transactions saw even stronger momentum, rising 33% to 3.1 billion transactions:
• Mobile money transactions surged 33% to 2.9 billion
• POS transactions grew 11% to 78 million
• Cheque and ATM transactions declined 15% and 14%, respectively, to 0.994 million and 30.2 million
Transaction Size Declines Despite Volume Growth
While retail payment volumes soared, the average transaction size declined 16% to K289, reflecting economic pressures despite higher overall transaction values. Mobile money led the contraction, falling 19% to K163. In contrast, other payment methods saw gains:
• EFT: +6%
• POS: +17%
• ATM: +9%
• Cheque: +2%
Zambia’s Shifting Payment Landscape and Associated Risks
Post-pandemic Zambia has seen a rapid shift toward digital payments, driven by higher smartphone and internet penetration rates. The growing integration between commercial banks, fintechs, and mobile network operators has fuelled financial inclusion, enabling seamless transactions across retail stores, e-commerce, churches, and other sectors. As a result, cash usage continues to decline, reinforcing the country’s broader transition toward a cashless economy.
However, the increasing reliance on digital payments has also expanded the cybersecurity threat landscape. Financial institutions are ramping up security controls to safeguard assets, while regulators have taken proactive measures. In 2023, the Bank of Zambia introduced cybersecurity guidelines to enhance financial institutions’ resilience. The Zambia Information and Communication Technology Authority (ZICTA) continues to play a critical role in regulating cyberspace and overseeing mobile network and internet service providers.
Other risks in the payment space include the recent drought induced power outages that have severely weighed mobile network operators resulting in deteriorating operational resilience manifesting in failed transactions. This to a large degree does frustrate customer experience. The telecommunications regulator ZICTA did fine Airtel for internet outages exceeding 2 days which caused an uproar in the market. Power outages have forced many commercial players to invest more in alternative power sources which has in turn resulted in higher operating costs.
As part of its modernisation efforts, the Bank of Zambia amended the Central Bank Act to establish a Financial Stability Committee, which will enhance operational resilience across the sector—including cyber risk management and broader systemic threats.
Zambia’s payments landscape is evolving rapidly, with POS and mobile money leading the charge. While challenges remain, particularly around cybersecurity and declining transaction sizes, the country is steadily marching toward a digitised, cashless future.
The Kwacha Arbitrageur, The Market Brain