Nigeria behind South Africa and Kenya in usage and speed of electronic bank transfers – study

A new study conducted by a B2B payment platform, Duplo, has revealed that Nigeria, Kenya, and Ghana all trail South Africa in the usage of electronic bank transfers and speed of processing invoices. Additionally, Kenya dominates in payment automation and mobile money services. 

Unlike Consumer-to-Consumer (C2C) and Business-to-Customer (B2C) transactions, Africa’s B2B segment has struggled to fully integrate with digital solutions. As such, Duplo noted in its report that the sector remains untapped despite having a market share of $1.5 trillion. Per a World Bank report, the world B2B payment market share is worth $125 trillion. 

Despite its volume in bank transfers, Africa’s digital B2B market suffers from a handful of issues like cybersecurity threats, limited infrastructure, poor internet connectivity, and unreliable systems. These challenges affect transaction speed and businesses’ growth potential.  

Duplo’s report remained optimistic regardless of the current shortfalls. It stated that Africa’s B2B payment system is close to a game-changing transformation. This is due to the growing digital transformation trend in the business scene. With more companies turning to automated payment systems like electronic bank transfers and other innovations, the above issues are likely to fade away. 

Duplo surveyed 1,218 representatives from 1,200 businesses across 4 countries, South Africa, Nigeria, Kenya, and Ghana for this research. 

Read also: African startups raised $1.43bn in H1 2023, a 53% YoY decline 

Electronic bank transfers lead in Africa

The study discovered that of 6 payment methods, 39% of vendors preferred electronic bank transfers. The alternatives were debit/credit cards (10%), cash, mobile money (18%), cheques (18%), and others. 

While the above figure represents a steady shift to digital payments, 14% of vendors still desired to transact with cash. Of the 4 countries, many companies in Ghana still depended on cash payments. Given that Ghana has a large informal market, it’s hard to dispute the above finding. 

Regarding electronic bank transfers, South Africa led the way with 49.1% adoption by the companies surveyed. Nigeria’s adoption rate (48.5%) placed it second.  Ghana and Kenya occupy third (34%) and fourth positions (31%) respectively. 

Moving on to debit/credit card payments, South Africa (21.7%) still dominated that segment. The report credited this feat to the country’s relatively developed banking sector and the deep presence of card services. Compared to South Africa’s (21.7%), Ghana placed last with a card adoption rate of 4.7% for vendors. 

As expected, mobile money reigned more in Ghana (30.4%) and Kenya (27.2%) than in other countries. This is chiefly due to the great strides made by Ghana’s MTN Mobile Money (MOMO) and Kenya’s M-Pesa. Nigeria (10.7 and South Africa’s numbers show a low penetration of this payment method. 

Meanwhile, cheques still dominate Kenya and Ghana compared to Nigeria and South Africa. However, the report noted that the need for paper trails (cheques) would lessen soon as more B2B companies solidify their relationship with technology.  

Regarding payment automation, 83% of Kenyans revealed they use either semi-automated or fully-automated systems. Moving to the wait time needed to process invoices, South Africa led other countries with 39.93%. However, its lead is tiny given Nigeria and Ghana’s numbers: 39.74% and 38.36% respectively.  

When it came to cross-border payments, the 4 countries preferred local banking partners and fintech platforms over offshore foreign accounts, Bureau De Change, and cash. Cash being the least used option indicated a gradual but sure transition to digital payment solutions.