The Covid-19 pandemic propelled the adoption of digital payment platforms for millions of people around the world and in Africa. This adoption continues to grow with reports suggesting that the global cashless payments volumes are expected to increase by more than 80% in 2025 and almost triple by 2030.
Africa, especially countries like Kenya are keeping up the pace. A McKinsey survey suggests that despite cash still being the King, its supremacy is likely to be challenged in the coming years as digital payments gain momentum with companies like Visa rushing to have a piece of this cake.
In December, the firm announced that it will invest $1bn in its business across Africa in the next five years to promote the adoption of digital payments in the region. The move is targeted to provide individuals and merchants with additional access to digital payments as the company seeks to strengthen its business in Africa.
Visa is banking on a number of factors to achieve this. The company says it will develop new technologies, and facilitate the digitization of economies in addition to investing in upskilling, creating new talents, and building capacity. The investment also intends to support financial inclusion in Africa, where around 500 million people are estimated to be excluded from the formal financial system.
“Every day, Visa supports digital commerce and money movement in every country across the continent, and Africa remains central to Visa’s long-term growth plans.’’ Visa chairman Al Kelly said.
“We look forward to continuing to work closely with our partners to advance the financial ecosystem, accelerate digitization, and to build resilient, innovative, and inclusive economies that will create shared opportunity and further spur Africa’s digital economy,” he added.
Cashless payments
Visa has been a big champion of cashless payments. The company notes on its website that it wants to empower merchants worldwide by creating more convenient, safe, and faster ways to pay. Cashless payments the company says can provide a variety of benefits for businesses and consumers such as incremental revenue, more productive workplaces, and even long-lasting, rewarding relationships.
When the pandemic hit, everyone went cashless after a number of governments banned the use of physical cash. In Kenya, the Government even went ahead and waived bank-to-mobile transaction charges as part of an emergency plan to encourage cashless transactions at the height of the Covid-19 pandemic.
In January this year though, the charges were re-introduced and what that meant is users will continue to incur extra charges when they transfer money from their banks to their mobile wallets. To avoid this, users like me had to stick to using my Visa card to pay for our daily transactions – from paying for fuel at the petrol shopping, to paying for my subscriptions, paying at the supermarket when doing house shopping – without worrying about incurring extra charges. For international subscriptions like Netflix, and Amazon Prime, the M-Pesa GlobalPay Visa Virtual Card really comes in handy.
Other than the zero charges that have made me stay Visa’s contactless payment technology also allows for a secure and convenient way to pay without having to physically hand over your card. You can easily look for the Contactless Indicator on your credit or debit card to know if your card can make contactless payments.
Visa has also made huge investments in card safety, to protect your card from being compromised and, prevent legitimate transactions from being wrongfully declined. The end goal is a seamless checkout experience.
Indeed, digital payments have shifted from being a nice-to-have for businesses to a necessity as more consumers prefer digital platforms as their primary payment method. The growth witnessed in Kenya is reflective of the payments landscape across other African countries. There is a shift in customer behavior and reinforcing adoption of digital payments across different business verticals.
More and more consumers in the region are embracing digital payments, particularly through eCommerce, contactless payments, and mobile money. Businesses of all sizes have also had to adapt to this clear and certain shift in consumer preferences, a trend that we expect to continue.
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