African Travel Payments Revolution: Why Tourists Abandon Bookings when Paying for Activities

Africa’s tourism industry stands at a critical crossroads. While the continent boasts unparalleled natural beauty, rich cultural heritage, and diverse wildlife experiences that attract millions of tourists annually, a significant challenge threatens its growth potential: payment friction leading to booking abandonment. In 2019, the industry accounted for about seven percent of Africa’s GDP and contributed $169 billion to its economy—about the size of Côte d’Ivoire’s and Kenya’s combined GDP.

The Scale of the Problem

While cart abandonment is a global phenomenon, African tourism faces unique challenges that exacerbate the problem. In 2022, shopping cart abandonment was most prevalent in the Caribbean, at a rate of over 92 percent of carts abandoned during online shopping. Second-ranked was Africa, where 85.15 percent of carts were abandoned instead of leading to a purchase.

The Middle East and African region collectively shows even more alarming statistics, with the highest cart abandonment rate among all regions at 93%. This extraordinarily high rate suggests systemic issues that go beyond typical e-commerce challenges.

Root Causes of Payment Abandonment

One of the primary drivers of booking abandonment in African tourism is the lack of diverse payment options. Only offering a single payment option gives your shoppers a good reason to abandon their purchase and book elsewhere. This is particularly problematic in Africa, where payment preferences vary significantly across countries and demographics.

• Limited Payment Methods: Cash remains predominant while tourists prefer digital options
• Infrastructure Challenges: Only 25% broadband coverage as of 2018
• Cross-Border Complexities: High fees and complex processes for international tourists
• Currency Issues: Unfavorable exchange rates and additional fees

The Mobile Money Revolution

Africa leads the world in mobile money adoption. For the past decade, Africa has maintained the lead in the evolution of global mobile money accounting for approximately 46% of the world’s registered mobile money users. Africa has some 166 live mobile money services including Airtel Money, Orange Money, MTN Mobile Money, Ecocash, and Tigo Pesa.

The continent accounts for some 781 million registered users, transacting some $44.9 billion volume in payments. Around 80 percent of respondents to McKinsey’s survey believe that the shift to e-payments will accelerate, with 84 percent expecting e-payments to grow by at least 30 percent per year through 2025.

Solutions and Best Practices

Tourism businesses must offer multiple payment options to reduce abandonment rates. 41% of merchants that do not offer localized payment options lose 60% or more of their sales to cart abandonment, compared to just 32% for those offering localized options.

The path forward requires collaboration between tourism operators, payment providers, regulators, and technology companies including SaaS providers such as Zuru — a tour operator booking software that helps businesses accept payments in multiple currencies and methods. By working together to create seamless, secure, and inclusive payment experiences, African tourism can overcome current challenges and realize its potential as a major driver of economic growth and development across the continent.