The APMs in Zambia: Mobile Money, Bank Interoperability, and the Rise of a Cash-Lite Economy

Introduction

Zambia represents a balanced African payments market—one that has neither leapfrogged entirely away from banks nor remained trapped in cash dependency. Instead, Zambia’s alternative payment methods (APMs) ecosystem has evolved through a gradual convergence of mobile money, bank-led digital payments, and national interoperability frameworks.

With a population of over 20 million, a largely informal economy, and strong regional trade links to Southern and Central Africa, Zambia’s payments landscape reflects the realities of daily retail transactions, SME commerce, agricultural payments, and cross-border remittances. Unlike markets where one dominant wallet dictates the ecosystem, Zambia’s APM market is competitive, interoperable, and regulator-driven.

Over the past decade, mobile money adoption, agent networks, government digitisation, and bank–telco collaboration have significantly reduced cash reliance. Today, APMs form the core transactional layer for millions of Zambians—especially for low-value, high-frequency payments.

This article provides a comprehensive examination of APMs in Zambia, covering market statistics, consumer behaviour, regulatory frameworks, key players, challenges, and Zambia’s role within Africa’s broader fintech and payments ecosystem.

1. Zambia’s Digital Payments Landscape: Market Foundations

Macroeconomic and Infrastructure Context

• Population: ~20 million
• Urbanisation: ~45%
• Mobile penetration: ~90%
• Smartphone penetration: ~45–50%
• Internet penetration: ~40%
• Bank account ownership: ~50–55%
• Mobile money account ownership: ~60–65%

Zambia is more banked than many African peers, but mobile money penetration has grown faster than traditional banking, especially outside major cities.

Payment Market Size and Growth

• Annual digital transaction value estimated at USD 40–45 billion
• Mobile money transactions growing at 20%+ CAGR
• Mobile money accounts for:
  • 70%+ of non-cash transactions by volume
  • Around 45–50% of non-cash transaction value
• Cash remains relevant but declining, particularly in urban centres

Zambia is transitioning from a cash-heavy economy to a cash-lite one, rather than attempting full cash elimination.

2. Understanding Alternative Payment Methods (APMs) in Zambia

In the Zambian context, APMs include:

• Mobile money wallets (telecom-led)
• Agent-assisted cash-in / cash-out systems
• Bank-led digital wallets
• Account-to-account (A2A) transfers
• USSD-based payments
• QR and merchant wallet payments
• Government and utility digital payments
• Regional cross-border mobile remittances

Zambia’s defining APM characteristic is interoperability between banks and mobile wallets, reducing ecosystem fragmentation.

3. Consumer Behaviour and Payment Adoption

Everyday Payment Usage

APMs are commonly used for:

• Retail purchases
• Transport fares
• School fees
• Utilities (electricity, water)
• Rent and remittances
• Agricultural payments

For many households, mobile wallets function as daily transaction accounts, even if bank accounts exist.

Urban vs Rural Adoption Patterns

• Urban areas (Lusaka, Ndola, Kitwe):
  • Smartphone wallets
  • Merchant QR payments
  • Bank–wallet transfers
• Rural areas:
  • USSD-based mobile money
  • Agent-assisted transactions
  • Agricultural and NGO disbursements

Mobile money bridges Zambia’s geographic and income divides.

SMEs and Informal Trade

• SMEs increasingly prefer mobile payments due to:
  • Faster settlement
  • Lower costs than cards
  • Reduced cash handling risks
• Informal traders widely accept wallet payments
• Digital transaction trails improve access to credit

APMs are driving gradual formalisation of informal commerce.

4. Key APM Categories and Leading Players in Zambia

1️⃣ Telecom-Led Mobile Money Wallets

MTN Mobile Money (MoMo)

• Market leader
• Millions of active users
• Supports:
  • P2P transfers
  • Merchant payments
  • Utility and government payments
  • Savings and micro-loans

MTN MoMo is Zambia’s primary retail payment rail.

Airtel Money Zambia

• Strong national coverage
• Competitive pricing
• Interoperable with banks and MTN MoMo
• Popular for P2P and SME payments

Zamtel Kwacha

• Operated by state-owned Zamtel
• Smaller footprint
• Used for niche and government-linked services

2️⃣ Agent Networks

• Tens of thousands of agents nationwide
• Provide:
  • Cash-in / cash-out
  • Wallet onboarding
  • Liquidity access
• Essential in rural and peri-urban areas

Agents act as the physical extension of Zambia’s digital payments system.

3️⃣ Bank-Led Digital Payments

Zambian banks provide:

• Mobile banking apps
• Internet banking
• A2A transfers
• Wallet-to-bank interoperability

Banks increasingly rely on mobile wallets for customer reach, while retaining roles in savings and credit.

4️⃣ National Payment Switch & Interoperability

Zambia has invested in:

• Interbank instant payment systems
• Wallet-bank interoperability
• Shared infrastructure

This has:

• Reduced transaction friction
• Encouraged competition
• Improved consumer choice

5️⃣ QR and Merchant Wallet Payments

QR payments are expanding in:

• Supermarkets
• Restaurants
• Fuel stations
• Pharmacies

Wallet-based acceptance is preferred over cards due to lower setup and transaction costs.

6️⃣ Cross-Border and Regional Payments

Zambia’s location makes it a regional payments corridor:

• Remittances to/from:
  • Zimbabwe
  • Malawi
  • DRC
• Mobile-based cross-border payments growing
• Still constrained by FX controls and settlement complexity

5. Regulatory and Policy Framework

Regulatory Authority

• Bank of Zambia (BoZ)

Key Regulatory Characteristics

• Licensing of non-bank PSPs
• Consumer fund safeguarding
• AML/KYC enforcement
• Interoperability mandates
• Collaboration with telecom regulators

Zambia’s regulatory approach is balanced and evolutionary, prioritising stability while enabling innovation.

6. Drivers Behind APM Growth in Zambia

1. High mobile penetration
2. Competitive telecom sector
3. Interoperability initiatives
4. Government digitisation
5. Financial inclusion strategies
6. SME and informal sector demand

Growth is structural rather than speculative.

Comprehensive List of Alternative Payment Methods (APMs) in Zambia

1️⃣ Mobile Money Wallets

• MTN MoMo
• Airtel Money
• Zamtel Kwacha

2️⃣ Agent-Based Payments

• Cash-in / cash-out services
• Assisted transactions

3️⃣ Bank & A2A Payments

• Mobile banking transfers
• Interbank instant payments

4️⃣ QR & Merchant Payments

• Wallet QR acceptance

5️⃣ Government & Utility Payments

• Tax, electricity, water, and public service payments via wallets

6️⃣ Cross-Border Mobile Payments

• Regional remittances

APM Comparison Table

7. Challenges and Constraints

• Persistent cash usage in rural areas
• Limited international card acceptance
• FX restrictions affecting cross-border payments
• Merchant education gaps
• Cybersecurity awareness

8. Zambia’s Impact on African and Global Fintech

Zambia offers lessons in:

• Wallet–bank interoperability
• Gradual cash-lite transitions
• Telecom–bank collaboration
• Regional payment corridors
• Inclusive payment infrastructure design

It is increasingly viewed as a model for mid-sized African economies.

9. Future Outlook (2025–2030)

Expected trends:

• Expansion of QR merchant payments
• Deeper wallet-bank integration
• Growth of digital lending and insurance
• Increased cross-border mobile payments
• Greater SME digitisation

Zambia is evolving toward a stable, interoperable digital payments ecosystem rather than a single-rail dominance model.

Conclusion

Zambia’s APM ecosystem reflects measured, sustainable digital payments growth. Through mobile money leadership, strong agent networks, and regulator-driven interoperability, the country is steadily reducing cash dependence while preserving financial stability.

For fintech builders, regulators, and payment providers, Zambia offers a realistic and replicable payments transition model—one that balances inclusion, competition, and systemic resilience.