Advances in technology have meant that more and more people are slowly but surely embracing digital payments due to the convenience that it brings. As a matter of fact, nowadays, it is easy to find yourself leaving the house without any physical cash but rather armed with mobile money and a Visa card.
This widespread adoption of digital payments was driven by among other things the rise of e-commerce in the country. Some of these online shops require that you pay in advance hence necessitating that one has to have a digital payment option. The Covid-19 pandemic also enhanced adoption as people were encouraged to utilize the various platforms in a bid to reduce the use of physical money. With banks reporting that sine this period, a good number of their customers prefer to use the various digital platforms as opposed to visiting a physical branch.
However, in as much as the populace has widely adopted digital payments, some businesses are yet to adopt the same with a high preference for cash. It was as a response to this that Visa commissioned a study in a bid to examine Kenya’s payment acceptance landscape. With a focus on how digital payments can empower SMEs while providing actionable recommendations for government support.
Visa conducted the study successfully with the Value of Acceptance: Understanding the Digital Payment Landscape in Kenya report being launched last week.
The report had interesting learnings which include the fact that SMEs who have adopted digital payments had a high satisfaction are of 69%. It also indicated that 40% of SMEs are already using financial technology while 68% are planning to invest in digital payment technologies. For those using cash only, 24% indicated that they plan to acquire POS systems while 52% plan to invest in new payment technology.
According to the report, digital payments are crucial for SMEs as they offer numerous advantages for Kenyan businesses. These include.
Higher Revenues
The study indicated that the businesses that had adopted digital payments were able to increase their revenues. This is due to fact that they were able to access a wider customer base of individuals who prefer making digital payments as opposed to cash transactions.
Customer Satisfaction
Businesses that have digital payments as an option reported that there was improved customer satisfaction. This was due to the fact that there able to make their payments conveniently as opposed to having to use cash which a good number of people are moving away from.
Reduced Risks
Digital payments have enabled businesses to reduce the operational risks that they faced due to using cash. This includes the risk of robbery, pilferage by employees as well as a complicated accounting process.
Data
The study found that digital payments enable businesses to acquire valuable data which can provide useful insights on how the business is doing. This data can be used by the businesses to source for financing, implement loyalty programs and generally enhance the customer experience leading to higher profits.
Some of the reasons advanced by businesses as to why they have not adopted digital payments include high transaction fees, set up costs, terms and conditions among others.
Visa is already addressing some of these concerns by setting up differentiated transaction costs for businesses depending on their size. As well as setting up QR codes which don’t need additional infrastructure other than a smart phone among other measures.