Over the years, digital payments have become very popular with consumers due to the convenience that they offer. This is because one can easily be able to do their shopping online, pay for their bills and even order lunch all at the comfort of your home.
With the rise in the number of consumers who are adopting digital payments, one would expect that there would also be a rise in the businesses that accept digital payments. However, this is not the case as some businesses still prefer to use cash. It was as a response to this that Visa commissioned a study in a bid to understand why the payment landscape in Kenya.
The report dubbed Value of Acceptance: Understanding the Digital Payment Landscape in Kenya was launched last week. The report gave us interesting tit bits on SME adoption of digital payments as well as the challenges that they face when adopting the same.
The Visa report indicated that SMEs who have adopted digital payments had a high satisfaction are of 69%. It also stated 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.
For those who are yet to adopt digital payments, they advanced various reasons such as complexity of digital payments, security concerns, high transaction fees, set up costs, terms and conditions among others.
The report highlighted various measures to boost digital payments which include.
1. Reducing Cost Barriers
In as much as digital payments are convenient and in demand by many a consumer. They are for the most part an expensive affair for most of the businesses. As such there is need for a concerted effort by the government to make these systems cheaper to adopt by SMEs. This includes incentives or subsidies that can be able to make these digital payments more accessible and attractive thereby encouraging wider adoption.
Visa on their part is countering this 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.
2. Supporting SMEs in Digital Transition
The report indicated that 52% of SMEs which are currently accepting cash only are interested in taking up digital payments. Which means that there is a huge opportunity to transition these SMEs onto digital payment platforms. The government can be able to support this move by offering resources and guidance that can be able to make the transition smoother.
3. Training
One of the reasons which was advanced by SMEs as a barrier to adoption of digital payment platforms is complexity. As such there is a need for a robust outreach and training on how to use these systems which can aid in boosting adoption.
4. Strengthening Security
For the businesses which accept cash only, 97% reported that they faced cash related risks with 62% indicating that they faced robbery risks while 52% indicated that they faced the risk of pilferage and embezzlement by employees.
By ensuring that the digital payment options are secure, they can be promoted as a safer option of conducting businesses which can help them mitigate the risks involved in cash transactions.