Part 2: The Evolving Batswana Consumer: A New Value Equation

Analyser by: Thapelo Bayford

III. The Evolving Batswana Consumer: From Data Cost to FinTech Value

The preferences of mobile network consumers in Botswana have undergone a significant transformation, particularly over the past five years. What was once a market primarily driven by the quest for affordable data and basic connectivity has matured into one where the breadth and quality of FinTech value-added services play an increasingly pivotal role in consumer choice.

A. Historical Context: The Primacy of Data Affordability

Historically, as in many emerging economies, the primary drivers for selecting a mobile network operator in Botswana were the cost of data and the extent of network coverage. Botswana, despite its middle-income status, faced challenges with internet accessibility, characterised by slow speeds, unreliability, and high data costs.¹³ Although state-owned fibre network entities and mobile operators have made strides in expanding 4G and initiating 5G rollouts, leading to improvements in average internet speeds (reaching 21 Mbps in the 2021/2022 financial year), the legacy of price sensitivity remains.¹³

Research into Botswana’s telecommunications sector has highlighted that promotional pricing strategies have a strong and significant positive relationship with customer brand switching.¹⁴ This underscores a historical consumer tendency to migrate between providers in search of better deals, particularly for data services. While promotional pricing could attract customers, its impact on long-term loyalty was found to be weak ¹⁴, suggesting that price alone was insufficient to secure lasting customer commitment.

B. The Shift: Rise of FinTech Value-Adds as a Key Differentiator (Last 5 Years)

The past five years have witnessed a discernible shift in consumer priorities. While data affordability remains a consideration, the value proposition offered by integrated FinTech services has emerged as a powerful differentiator. This evolution is supported by multiple converging trends. The Bank of Botswana, in its 2021 “Tsa Tuelano” newsletter, observed that consumers are increasingly demanding faster, more convenient, and flexible payment methods, a demand effectively met by digital financial services.⁴ This demand for convenience is a direct reflection of the value consumers place on FinTech offerings.

The sheer volume of mobile money transactions, which topped P33.5 billion in the year to March 2024 (an increase of over 26% year-on-year), is a testament to the active adoption and reliance on these services.⁷ This explosive growth signifies that consumers are not just experimenting with mobile money but are integrating it deeply into their financial lives.

While mobile data service revenue is still projected to grow, driven by increasing mobile internet subscriptions and the adoption of 5G technology ¹⁶, the narrative around value is expanding. Operators are indeed offering “data-centric plans,” but the “centric” aspect increasingly encompasses a bundle of digital services, with FinTech solutions often forming the core of this enhanced offering.¹⁶

Furthermore, studies indicate that while attractive pricing can trigger brand switching, true customer loyalty is more often a product of a superior overall customer experience rather than price alone.¹⁴ Comprehensive FinTech services—encompassing seamless payments, access to credit, insurance products, and efficient bill management—are major contributors to this enhanced customer experience.

This leads to a crucial understanding of the current market: the consumer definition of “value” from a mobile operator has broadened significantly. Affordable and reliable data access is now largely considered a baseline expectation—table stakes in a competitive market. The differentiating factor, and increasingly a primary driver of network choice and loyalty, is the richness, convenience, security, and integration of the FinTech services offered. Consumers are not abandoning their need for cost-effective data, but they are layering upon that an expectation for sophisticated financial services accessible through their mobile devices. The “value stack” they seek from a mobile network operator is now considerably taller and more complex, with FinTech services forming a critical upper layer.

C. Drivers of the Shift in Consumer Preference

Several factors have fueled this evolution in consumer preferences in Botswana:

1. Increased Digital Literacy and Smartphone Penetration: As more Batswana have gained access to smartphones and become more adept at using digital services, their appetite for more sophisticated mobile solutions has naturally grown.¹ While challenges remain, particularly concerning smartphone penetration in rural areas ¹, the overall trend is towards greater digital engagement. As of early 2025, Botswana had 4.21 million cellular mobile connections, equivalent to 166% of the total population, with 91.2% of these connections being broadband (3G, 4G, or 5G). Internet penetration stood at 81.4%.¹⁷ This widespread access to mobile broadband creates a fertile ground for FinTech adoption.
2. Demonstrated Convenience and Utility: Positive initial experiences with basic mobile money functionalities, such as P2P transfers and airtime top-ups, have cultivated a demand for more comprehensive financial services delivered via the mobile platform. Success in simpler services has built trust and familiarity, encouraging users to explore more advanced offerings like mobile loans, insurance, and international payment capabilities.
3. Competitive Offerings from Telcos: As telecommunications companies have progressively enhanced their FinTech portfolios, they have simultaneously educated the market and elevated consumer expectations. The availability of a diverse range of services, from bill payments and merchant services to savings accounts and funeral plans, across different platforms has fueled demand and normalized the use of mobile devices for a wide array of financial transactions.¹⁸
4. The Financial Inclusion Imperative: For a significant portion of the population, mobile FinTech services represent not just an alternative convenience but their primary, and sometimes only, access point to the formal financial system. For these users, the quality, range, and reliability of mobile financial services are of paramount importance, directly impacting their economic well-being and participation.
5. Effective Marketing and Awareness Campaigns: Telecommunication companies have actively marketed their FinTech services, shaping consumer perceptions and highlighting the tangible benefits that extend beyond basic voice and data connectivity.²² These campaigns have played a role in educating consumers about the possibilities offered by mobile financial services.

Table 2: Evolution of Consumer Mobile Network Priorities in Botswana (Illustrative – Last 5 Years)

Part 3: The Broadening FinTech Battlefield: Competitive Dynamics

IV. The Competitive FinTech Landscape: Beyond a Single Leader

While one mobile money service has achieved remarkable dominance, it operates within an increasingly competitive FinTech landscape in Botswana. Other major telecommunications players have also recognized the strategic imperative of robust mobile financial services and are actively developing and promoting their respective offerings.

A. Competing Mobile Money Platforms

Other significant competitors in Botswana’s telecommunications market offer their own mobile money services. These platforms provide a suite of financial services, including peer-to-peer money transfers, bill payments for various utilities and services, and the purchase of prepaid electricity and airtime.¹⁸ One such service held an 11% share of the mobile money market as of March 2024, while another held 7%.⁷

A key strategic thrust for these competing services has been their integration with the traditional banking sector. This is evident through bank-to-wallet services, which facilitate fund transfers from bank accounts held at partner banks directly to mobile money wallets.¹⁸ Additionally, card-to-wallet features allow users to load their mobile money accounts using bank cards via online portals.¹⁸ These platforms also offer services such as instant loans and international money transfers.¹⁸

Telecommunication companies are demonstrably committed to expanding their FinTech divisions. They have been actively recruiting senior leadership, including heads of FinTech and product management managers, tasked with developing and executing innovative FinTech solutions, building robust merchant and agent networks, enhancing existing product portfolios, and forging strategic partnerships.²³ This signals a clear intent to compete more aggressively in the FinTech space and leverage it for broader business growth.

Some platforms have also pursued a strategy of product diversification through partnerships. A prominent example is collaboration with insurance providers to offer funeral insurance products where premiums can be paid via the mobile money service.²⁰ This move indicates an ambition to bundle various financial products onto mobile platforms, thereby increasing customer engagement and value. These services also support international money transfers to several African countries and offer micro-loan facilities.²⁰

B. Other Players and Ecosystem Dynamics

Beyond the major telcos, other entities like the national postal service also participate in the mobile money market, with one such service holding a 4% share as of March 2024.⁷ While smaller, its presence contributes to the overall competitive dynamic.

Simultaneously, traditional banking institutions are not passive observers. They are heavily investing in their own digital banking platforms, mobile apps, and online services.¹ These banks are also exploring partnerships with telcos and FinTech startups, creating a complex ecosystem characterized by both competition and collaboration.¹ The drive for greater interoperability between banking systems and FinTech platforms, including mobile money services, is recognized as a critical factor for expanding reach and enhancing user convenience.¹

The concerted and substantial investments by all major telecommunications operators into their FinTech divisions signal a fundamental market shift. The success of one leading mobile money service has unequivocally demonstrated the immense strategic value of a robust and widely adopted FinTech offering. In response, competitors are not merely playing catch-up; they are strategically repositioning FinTech as a central pillar of their business models. Recruitment for high-level FinTech leadership roles, coupled with explicit goals of strategy development, partnership building, product innovation, and market share growth in the FinTech domain, underscores this.²³ The continuous enhancement of competing mobile money services, including the introduction of new products like insurance and advanced loan facilities, further illustrates this intensified focus.¹⁸ This environment has cultivated an “arms race” for FinTech supremacy, where FinTech is no longer a peripheral service but a critical battleground for customer acquisition, loyalty, and future revenue streams in Botswana’s telecommunications sector. Each player must continuously innovate and expand its FinTech offerings to maintain or improve its competitive standing.

Part 4: Navigating Botswana’s FinTech Horizon: Opportunities, Hurdles, and Strategic Imperatives

V. The Road Ahead: Opportunities and Challenges for Botswana’s FinTech-Driven Future

Botswana stands at a pivotal juncture in its FinTech journey. The progress achieved, particularly in mobile money adoption, has laid a strong foundation. However, realising the full transformative potential of FinTech requires navigating a complex landscape of opportunities and persistent challenges.

A. Untapped Potential and Growth Vectors

Despite the impressive growth, significant avenues for further FinTech development and impact remain:

1. Deepening Financial Inclusion: A considerable segment of Botswana’s population remains unbanked or underbanked.¹ The FinScope Botswana 2020 Consumer Survey indicated that while financial inclusion had increased, with mobile money playing a significant role (54% usage), there was still room for growth.²⁶ There is a substantial opportunity to extend the reach of financial services, especially in rural areas. This can be achieved by expanding agent networks, which are crucial for cash-in/cash-out services, and by concerted efforts to improve digital literacy and increase smartphone penetration in underserved communities.¹ The target set for 2021 was to reduce financial exclusion to 12%.²⁶
2. Advanced FinTech Services: The current FinTech landscape in Botswana is largely dominated by payment services and basic P2P transfers. There is immense potential to move beyond these foundational offerings towards more sophisticated financial products. This includes developing and deploying micro-insurance products tailored to low-income groups, innovative mobile savings solutions, digital credit scoring mechanisms that can unlock access to affordable credit for individuals and SMEs, and specialized financial tools for small and medium-sized enterprises. The FinScope 2020 survey noted an overall decline in credit use but an increase in credit from “other formal non-bank” providers, suggesting an opening for FinTech lenders who can offer accessible and appropriately designed credit products.²⁶
3. Open Banking and Enhanced Collaboration: The concept of open banking, which allows for secure data sharing between financial institutions and third-party providers (with customer consent), can be a powerful catalyst for innovation. Fostering greater collaboration between banks, telcos, and agile FinTech startups through enabling regulatory frameworks, such as open banking policies, can lead to the development of novel, integrated financial services that offer enhanced value to consumers.¹
4. Cross-border Payments and E-commerce Enablement: Building on successes like cross-border mobile money transfer initiatives ⁹, there is an opportunity to further expand secure, efficient, and cost-effective cross-border mobile money services within the Southern African region and beyond. Additionally, as e-commerce gains traction—generating $230 million in revenue in 2021, though penetration remained below the regional average ¹³—integrated digital payment solutions are critical for its growth. FinTech can play a vital role in providing seamless and secure payment gateways for online businesses and consumers.

B. Overcoming Persistent Hurdles

The path to a mature FinTech ecosystem is not without its obstacles:

1. Regulatory Agility and Clarity: A dynamic and responsive regulatory framework is essential. While the Bank of Botswana has made strides with initiatives like the Electronic Payment Services (EPS) Licensing Guidelines ²⁸, the regulatory environment needs to continuously evolve to balance the promotion of innovation with robust consumer protection, data privacy safeguards, and systemic stability.¹ Addressing identified “regulatory loopholes” and “weak fintech regulations” is crucial for fostering trust and encouraging investment.¹ The Bank of Botswana itself has acknowledged the need to regulate activity rather than just institutions, accommodating new entrants while ensuring orderly conduct.²⁹
2. Cybersecurity and Fraud Prevention: The proliferation of digital financial transactions inevitably brings an increased risk of cyber threats, including phishing attacks and various forms of online fraud.¹ Building and maintaining a resilient cybersecurity infrastructure, coupled with ongoing consumer education on identifying and avoiding scams, is paramount. The leadership of one major operator highlighted being “aggressive in reducing scams” as a key operational focus, underscoring the industry’s awareness of this challenge.¹¹
3. Digital and Financial Literacy: Effective adoption and responsible usage of FinTech services depend significantly on the population’s digital and financial literacy levels. Initiatives to enhance understanding of how these services work, their benefits, associated risks, and consumer rights are vital for building trust and maximizing uptake.¹ The Bank of Botswana has recognized that fintech emergence presents risks to consumers if not well understood.⁴
4. Infrastructure Gaps: Despite progress, disparities in digital infrastructure persist, particularly the limited internet connectivity in rural areas and the affordability of smartphones for all segments of the population.¹ These gaps can hinder equitable access to the benefits of FinTech and must be addressed through targeted investments and policies.

The successful deployment and widespread adoption of more complex and value-added FinTech services are intrinsically linked to progress in these underlying areas. It is not enough for telcos and FinTech companies to develop innovative products; their uptake and impact are contingent upon the concurrent development of robust and accessible digital infrastructure, especially in remote regions, and a significant uplift in the digital and financial literacy of the general populace. Advanced FinTech services, such as sophisticated insurance products, digital investment platforms, or AI-driven financial advisory services, inherently demand a higher level of digital comfort, financial understanding, and reliable, affordable access than basic mobile money transactions. If potential users lack affordable smart devices, consistent internet access, or the knowledge to navigate these services securely and effectively, adoption will inevitably be constrained, irrespective of the ingenuity of the FinTech solutions themselves. Therefore, for Botswana to transition to a more mature and inclusive FinTech ecosystem, a symbiotic approach is required where investments in infrastructure and education proceed in lockstep with FinTech product development and innovation.

VI. Conclusion and Strategic Recommendations

A. Summary of FinTech’s Transformative Impact

FinTech, with mobile money at its vanguard, has undeniably reshaped Botswana’s financial and telecommunications sectors. It has emerged as a powerful engine for financial inclusion, bringing millions into the formal financial fold and offering unprecedented convenience in managing daily financial lives.² The achievement of a leading market position by one operator, significantly fueled by the strategic deployment and widespread adoption of its mobile money service, stands as a compelling testament to FinTech’s disruptive and market-defining potential.⁷ This transformation extends beyond mere technological adoption; it reflects a fundamental shift in how financial services are delivered, accessed, and valued in the country.

B. The New Consumer Mandate

The Batswana consumer has evolved. While affordable data and reliable connectivity remain important, they are increasingly viewed as baseline expectations. The new mandate from consumers is for a sophisticated blend of these core telecom services with rich, secure, and convenient FinTech value-adds.¹⁴ This shift has made the quality and breadth of FinTech offerings a critical competitive differentiator for mobile network operators, influencing customer choice, loyalty, and overall market positioning. The “value stack” has expanded, and FinTech now sits prominently at its apex.

C. Strategic Recommendations for Stakeholders

To navigate the path ahead and fully harness the potential of FinTech for Botswana’s continued development, a concerted effort from all stakeholders is required:

1. For Telecommunications Operators:

• Continuous FinTech Innovation: Persist in innovating within the FinTech space, focusing on enhancing user experience (UX), bolstering security features, and diversifying service offerings to include more advanced financial products like micro-insurance, savings, and SME-focused solutions.
• Invest in Ecosystem Enablers: Expand agent networks, particularly in underserved rural areas, to improve accessibility. Invest in targeted digital and financial literacy initiatives to empower customers.
• Strategic Partnerships: Actively seek and cultivate deeper partnerships with banks, other financial institutions, and emerging FinTech startups to create integrated and novel value propositions.

2. For Regulators (Bank of Botswana, BOCRA):

• Enhance Regulatory Agility and Foresight: Continue to develop a regulatory framework that is both supportive of innovation (e.g., in areas like open banking, digital identity, and data protection) and robust in its protection of consumers and the financial system. This includes proactive measures against cybersecurity threats and ensuring fair practices. The Electronic Payment Services (EPS) Licensing Guidelines are a good foundation ²⁸, but ongoing adaptation is key.
• Foster Collaboration and Interoperability: Actively promote and facilitate interoperability between different mobile money platforms and between mobile money systems and the traditional banking infrastructure to enhance convenience and efficiency for users.¹
• Strengthen Oversight: Ensure that as FinTech services become more complex, regulatory oversight keeps pace, particularly concerning risk management, AML/CFT compliance, and the safeguarding of customer funds and data.⁴

3. For Government and Policymakers:

• Prioritize Digital Infrastructure Investment: Accelerate investments in national digital infrastructure, with a specific focus on ensuring affordable and reliable broadband connectivity in rural and remote areas to bridge the digital divide.¹
• Champion Nationwide Literacy Programs: Develop and implement comprehensive, nationwide digital and financial literacy programs targeting all segments of the population to ensure citizens can confidently and safely utilize digital financial services.¹
• Create an Enabling Environment for FinTech Startups: Foster a supportive ecosystem for local FinTech innovation through initiatives such as regulatory sandboxes, access to funding, and skills development programs.

4. For Traditional Financial Institutions:

• Embrace Full Digital Transformation: Accelerate efforts to digitize operations and customer interactions fully. Move beyond basic mobile banking to offer truly customer-centric digital financial solutions.
• Strategic Collaboration: View FinTechs and telcos not just as competitors but as potential partners. Explore strategic alliances to leverage mutual strengths and expand market reach.
• Focus on Customer-Centric Digital Offerings: Develop digital products and services that are tailored to the evolving needs and preferences of Batswana consumers, emphasizing convenience, security, and value.

By embracing these strategic imperatives, Botswana can continue to build upon its FinTech successes, driving greater financial inclusion, fostering economic growth, and empowering its citizens in an increasingly digital world. The journey is ongoing, but the transformative power of FinTech offers a clear path towards a more prosperous and digitally enabled future for the nation.

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