Financial technology (fintech) investors are calling for policies that promote development and adoption of innovations to help the continent achieve the World Bank target of universal financial access by 2020.
Financial experts, industry leaders and policy developers who attended the Africa Payments Innovation Summit in Nairobi last week said digital disruption could increase the continent's banked population.
"Regulators are more used to brick and mortar financial institutions than the telcos, which have taken over financial services.
"An appropriate conversation between innovators and regulators is important if we are going to milk the potential of new technologies in financial services," said United Nations Conference on Trade and Development secretary general Mukhisa Kituyi at the conference.
Riadh Naour, head of advisory services at the International Finance Corporation, said digital payment platforms Kenya's M-pesa and South Africa's SnapScan are setting the pace in financial inclusion in Africa.
"Financial inclusion is an effective way to fight poverty in Africa while enabling populations in remote locations access critical services like health and education," Mr Naour said.
Greta Bull, the CEO of Group to Assist the Poor, said government support for indigenous innovations will be key in ensuring that Africa competes favourably in the digital payments space.
"There are interesting models in China, India and other emerging markets that can be replicated in Africa to strengthen its lead in digital payment platforms," she said.
The emergence of mobile money services over the past decade has offered financial inclusion in Africa.
According to the GSMA, the body that represents the interests of mobile operators worldwide, there were 277 million registered mobile money accounts in sub-Saharan Africa at the end of 2016.
From performing basic transactions - including airtime top-up - mobile money services enable other financial transactions such as paying bills, merchant payments and international remittances.
But despite the progress, at least 85 per cent of transactions in the region are still in cash.
"Mistrust between banks and telcos is basically about whose customer they are serving, who owns the infrastructure, and the loading of additional costs on transactions between the two," said Equity Group CEO James Mwangi. Equity owns mobile payments platform Equitel.
In 2017, Kenyan banks launched PesaLink, a mobile and electronic money transaction service to rival the M-pesa service. PesaLink has partnered with over 40 banks in the country and spread to more than 10 countries with about 30 million users.
Daniel Monehin, Mastercard's executive vice-president of remittances, said trust between banks and telcos is shaky. "Fintech start-ups are not just a threat to banks and financial institutions but also to themselves if they don't work in synergy," he said.
Central Bank of Kenya Governor Patrick Njoroge warned innovators against getting carried away by technology. "The important thing is to know what problem you're solving for your customer, " he said.