Nigeria trails South Africa and Kenya in the development of key business-to-business (B2B) payment processes across Africa, including the adoption of electronic bank transfers as well as the speed of processing invoices and payment automation, a new report by Duplo has revealed.
The report titled, ‘Exploring the state of B2B Payments in Africa’, includes surveyed opinions of more than 1,200 professionals from Kenya, Nigeria, South Africa and Ghana.
South Africa leads the way in electronic bank transfers, with 49.1 per cent choosing it as their preferred way to pay vendors, followed by Nigeria (48.5 per cent), Ghana (34 per cent) and Kenya (31.9 per cent).
Kenya leads in payment automation, with 83.4 per cent of Kenyans saying that their payment system was either semi-automated or fully automated, compared to Nigeria (79.9 per cent), South Africa (71.69 percent) and Ghana (67.23 per cent).
When it came to the speed of processing invoices, South Africa has a slim lead, with 39.93 per cent stating that it typically takes a day or less to process invoices compared with Nigeria’s 39.74 per cent.
Africa’s B2B payment sector represents a significant, yet largely untapped opportunity. This is partly due to the complexity and larger transaction volumes associated with B2B payments.
According to the World Bank, the continent’s share of the global B2B payment opportunity stands at $1.5 trillion. However, despite this promising potential, many businesses grapple with considerable payment delays and other issues with their payment processes that negatively impact their cash flow and slow their growth.
In recent years, digital payment solutions have eased many of these challenges but there remain several issues to be addressed in the journey of easing the flow of money between businesses in Africa.
For example, security ranked as the most critical feature across the board for respondents when choosing B2B payment software, with 35.89 per cent selecting it as the feature they valued the most.
Across individual countries, security was also the top feature – Kenya (39.9 per cent), Ghana (36 per cent), South Africa (35.6 per cent) and Nigeria (32.2 per cent) – emphasising the importance companies attach to safeguarding their financial data.
Functionality and ease of use 17.6 per cent, multiple payment options 13.5 per cent and speed 12.9 percent follow, showing a preference for payment flexibility and quick transactions. Pricing (11.5 per cent) and scalability (8.2 per cent) are less prioritised, suggesting a focus on functionality and immediate needs.
Speaking on the report, Chief Executive Officer and co-founder of Duplo, Yele Oyekola, said despite various challenges, the future of B2B payments in Africa is set for dynamic growth and innovation, signalling a new era of opportunities and expansion for the continent’s business ecosystem.
Source: The Guardian