Report Shows Why More Businesses Are Moving To Digital Payments

 

Report Shows Why More Businesses Are Moving To Digital Payments

Due to the simplicity of use, dependability, and speed of digital payments, African firms are moving away from cash-based business-to-business (B2B) transactions, according to a recent analysis by Duplo, a commercial payment platform for African businesses.

More than 1,000 business owners from Kenya, Nigeria, South Africa, and Egypt were questioned for the State of B2B Payments in Africa research, and they stated that these qualities were what motivated their B2B payments.

The survey also showed that bank transfers, rather than cash, checks, or mobile money, are currently the most popular method of payment between firms.

Analysing the findings of the survey, Duplo said: “When asked what they liked about their current payment methods, 29% of respondents chose ease of use, 28% chose reliability and 18% chose speed. More than digitised processes (10%), affordability (10%) and customisation (5%).”

“When asked which methods their organisations used for making payments to other businesses, 85% of respondents chose bank transfers as one of the ways they made payments, compared to 60% for cash, 23% for cheques, and 17% for mobile money. When asked about receiving payments from other businesses, 62 percent said they received payments via bank transfers, compared to 59% for cash, 32%for cheques, and 15% for mobile money,” it added.

The report also highlighted that 44% of businesses still have to wait more than 24 hours to receive payments from business customers and partners. 3% take up to 7 days to receive payments, 17% take up to 30 days and 3% take more than 30 days to receive business payments. This presents a significant challenge for businesses that are often unable to maximise the opportunities available to them due to cash flow restrictions induced by complex payment flows.

Commenting on the findings of the report, CEO and co-founder of Duplo, Yele Oyekola, said: “African businesses, large and small, are the lifeblood of the continent’s economy, and making it easier for more to flow between them should be a priority. The data from the report highlights a much-needed transition from cash-based payments but that is just the beginning. There are still various challenges in the payment process that make it difficult for businesses to maximise opportunities to scale their operations. We need to constantly innovate around these challenges to more effectively position African businesses for the growth they need to power economic growth on the continent”.

Duplo points out that the report's apparent shift away from cash-based transactions signals a significant change in business practices, since cash payments have long dominated B2B payments on the continent. The report's findings also imply that African firms desire effective and efficient payment systems rather than digital payments only for show. This goes beyond the clamor for digitized payments.

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