Algeria’s banking sector is evolving rapidly, with the rise of neobanks, mobile money services, and alternative payment methods gaining momentum. Traditionally, Algeria’s financial landscape has been heavily dominated by state-controlled banks, which have made banking services relatively inaccessible to a large portion of the population, particularly in rural areas. However, with the advent of digital banking and mobile payments, financial inclusion is slowly improving.
Neobanks and Digital Payment Solutions in Algeria
The growth of neobanks, especially across Africa, is reflected in Algeria as well. While neobanks in Algeria have yet to reach the scale of countries like Nigeria or South Africa, the introduction of digital-only banks is making banking services more accessible. Companies like BaridiMob, a mobile payment system operated by Algeria’s postal service, have seen growing adoption rates since their launch. In 2023, BaridiMob registered over 2 million users, and it has revolutionised how Algerians access financial services. By allowing users to transfer money, pay bills, and even withdraw cash from ATMs via mobile devices, BaridiMob has become a key player in the country’s financial landscape.
Furthermore, CIB, an Algerian fintech company, is emerging as a strong alternative to traditional banks. With its mobile platform, users can make instant payments, open savings accounts, and access credit lines without the need for a physical bank. This shift is crucial for improving financial inclusion in Algeria, especially for younger people and those in underserved regions.
Mobile Payments and E-Wallets in Algeria
Mobile payments have seen an impressive surge in Algeria over the past few years, driven by increasing smartphone penetration, which has reached 80% in urban areas. While traditional banking services are still limited in rural parts of the country, mobile wallets have opened up new possibilities for millions of unbanked Algerians. Paymee and Khipu are two prominent mobile payment providers that have gained traction in Algeria. These digital wallets allow users to make fast and secure payments, perform peer-to-peer transfers, and access banking services without visiting a physical bank branch.
According to recent reports, mobile payment transactions in Algeria increased by 45% from 2021 to 2022, highlighting the growing appetite for digital solutions. With the continued expansion of mobile networks and internet access, the future looks bright for mobile payments in Algeria.
Neobanks vs. Traditional Banking in Algeria
While traditional banks in Algeria still dominate, particularly in terms of deposits and loans, neobanks and mobile payment platforms are increasingly offering services that cater to the modern consumer’s demand for convenience. The key difference lies in their ability to provide faster, more efficient, and lower-cost services. Neobanks, for instance, have no physical branches, which allows them to operate with lower overhead costs and pass these savings on to users. This is a game changer for Algerians who have long struggled with the inconvenience of slow, bureaucratic banking systems.
The Future of Payments in Algeria
As financial inclusion continues to be a priority, new payment methods are expected to play a significant role in Algeria's economic development. Mobile payments and neobanks are set to lead the way, with a projected annual growth rate of 25% for digital payments in Algeria. These innovations will not only help improve financial accessibility but also pave the way for new sectors like e-commerce and online gambling, which will increasingly rely on mobile and digital payment systems.