A newly released report by Visa, titled “Value of Acceptance: Understanding the Digital Payment Landscape in Kenya”, highlights a significant shift among Kenyan Small and Medium Enterprises (SMEs) from cash-based transactions to digital payment solutions.
The study positions Kenya as a leader in digital payment adoption across Africa, with many SMEs recognizing the benefits of digital transactions in enhancing business efficiency and security.
Growing Interest in Digital Payments
The report reveals that a large number of cash-only SMEs intend to transition to digital payments due to the need for faster transactions, enhanced security, and improved financial management.
Currently, 40% of SMEs already utilize financial technology, while 68% plan to invest in new digital payment solutions, including mobile wallets and card payment systems.
Businesses that have already adopted digital payments report higher customer satisfaction, reduced fraud risks, and improved access to financial records, enabling better decision-making.
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Security Concerns and Barriers to Adoption
Despite the growing shift towards digital transactions, some barriers still hinder full adoption. The study found that 97% of cash-only businesses cite theft and embezzlement as major risks, while others worry about transaction fees, perceived complexity, and cybersecurity threats.
To address these challenges, Visa recommends that government incentives and subsidies be introduced to lower costs, security measures be strengthened to enhance trust, and financial literacy programs be expanded to educate SMEs on the advantages of digital transactions.
Economic Impact of Digital Payments
The study highlights the economic benefits of digital payments, showing that shifting from cash to digital transactions can boost GDP by 1% to 2% annually.
Additionally, increasing digital payments by 5% per year over five years could help reduce Kenya’s informal economy by up to 13% while also increasing tax revenues.
These findings reinforce the potential of digital payments in driving national economic growth and financial inclusion.
Visa’s Role in Advancing Digital Payments
Visa is playing a key role in accelerating digital payment adoption in Kenya. Through Tap to Phone, contactless payments, and SME financial education programs, Visa is working with government agencies, financial institutions, and businesses to expand access to digital transactions.
With most Kenyan SMEs recognizing the long-term benefits of digital payments, the shift toward a cashless economy is expected to continue.
The report emphasizes that investment in SME digitalization is crucial for economic resilience, competitiveness, and financial sustainability, shaping the future of commerce in Kenya.
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