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KYC Best Practices04 Aug 2023

Why Global Payments Providers Need a Localised KYC Solution for Operating in Africa

Megan Keirstead

Product Marketing Manager

In today's interconnected world, global payment providers are crucial in facilitating cross-border transactions and enabling businesses to operate at scale. While many local payment solutions are on the market in Africa, global payment providers still play a pivotal role in facilitating payments and supporting economic growth. However, operating in the diverse and dynamic African market presents unique challenges concerning Know Your Customer (KYC) compliance.  

Global payments providers know they need to offer localised shopping and payment experiences when working with international users; the same goes for the identity verification process. A one-size-fits-all approach to KYC processes can result in a cumbersome and time-consuming customer onboarding experience.  

By implementing a localised KYC solution, global payments providers can tailor the onboarding process to align with the preferences and expectations of customers in different regions while keeping users and their platforms safe. 

Here are some ways a local solution provider can help you build the best KYC experience in the markets:

Local providers can help you stay compliant with local regulations.

This may seem obvious, but Africa comprises multiple countries, each with its own regulatory environment and KYC requirements. Adhering to these regulations is crucial for global payment providers to avoid penalties and maintain a strong reputation.  

A localised KYC solution enables providers to customise their onboarding and verification processes according to the specific regulations of each jurisdiction. This ensures customer data and documentation meet the necessary standards, mitigating compliance risks and fostering trust with local authorities.

Local providers have tailored their fraud prevention solutions.

Fraud is an ever-evolving problem, but it is not going away. In fact, in many jurisdictions, fraud is on the rise. For example, the Southern African Fraud Prevention Service (SAFPS) reported a 600% increase in incidents of fraud reported by their members in 2022 compared to 2018.
Fraud can be a significant concern for payment providers operating in Africa. A localised KYC solution allows providers to leverage region-specific insights and fraud patterns to bolster fraud detection and prevention measures.  

By understanding the unique fraud risks prevalent in Africa, such as mobile money fraud and duplicate account scams, providers can implement targeted strategies to protect themselves and their customers. This proactive approach builds trust, safeguards the payment ecosystem, and bolsters the provider's reputation in the African market.

Local providers build the customer experience for local expectations.

Regarding KYC procedures, a one-size-fits-all approach can make the onboarding process more complicated than necessary for the end user. Customers have a certain expectation of how to signup and get verified for other services in their market. Straying too far from the norm may confuse the end user and lead to higher user drop-off during onboarding. 

Some of the necessary customisations might include:  

  • offering language options that cater to diverse linguistic backgrounds
  • customising user interfaces for simplicity and accessibility
  • accommodating varying document requirements for identity verification
  • leveraging alternative verification methods for individuals without traditional identification documents
  • and optimising the KYC solution for connectivity limitations in certain regions.

A local KYC provider can help navigate the expectations of local end-users when going through an onboarding and identity verification journey. By respecting and accommodating these unique requirements, providers can deliver a more personalised and inclusive onboarding experience to their African customers.

Localise your African Operation with Smile ID

The bottom line is without consideration for localisation; you may unintentionally make onboarding a complicated process for your end users. Good users will be rejected, and more customers will abandon your onboarding journey. Working with a local KYC partner can help avoid the common pitfalls of operating in a new market. 

Smile Identity has built our solutions with the local users' needs across Africa in mind. We have made several optimisations, including: 

  • Support for older operating systems and lower-end smartphones
  • Built to account for low light conditions
  • Africa-based teams with deep knowledge of African ID documents
  • Unparalleled legal access to African ID authorities

Smile ID has helped payments providers like Flutterwave, Paystack and OPay achieve up to 90% user approval rates for their African end users in under 2s. 

"Smile ID Biometric KYC has helped us reduce fictitious signups by 90% and reduced merchant onboarding from 24 hours to 10-15 mins."
 - Aramide Ayinla, Financial Crimes Analyst, Flutterwave.

Talk to one of our Africa KYC experts to learn how you can localise your KYC journey in Africa. 

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