Africa’s Untapped $1.5T B2B Payments Scene Faces Fintech Disruption

By  |  July 26, 2023

A new report from Duplo, a business payment platform for African businesses of all sizes, suggests that Nigeria trails South Africa and Kenya in the development of key B2B payment processes across Africa, including the adoption of electronic bank transfers, speed of processing invoices and payment automation.

According to the Exploring the State of B2B Payments in Africa report, which includes the 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 percent choosing it as their preferred way to pay vendors, followed by Nigeria (48.5 percent), Ghana (34 percent) and Kenya (31.9 percent). 

Kenya leads the way in payment automation, with 83.4 percent of Kenyans stating that their payment system was either semi-automated or fully automated, compared to Nigeria (79.9 percent), South Africa (71.69 percent) and Ghana (67.23 percent). When it came to the speed of processing invoices, South Africa has a slender lead, with 39.93 percent stating that it typically takes a day or less to process invoices compared with Nigeria’s 39.74 percent.

“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,” says Yele Oyekola, CEO and co-founder of Duplo. “The opportunity to automate accounts payable and receivable and transform other aspects of the B2B payments process offers great potential to reduce payment delays, enhance cash flow and drive growth for businesses across the continent.”

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 USD 1.5 T. 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 payments solutions have eased many of these challenges but there remains a number of 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 percent selecting it as the feature they valued the most. Across individual countries, security was also the top feature – Kenya (39.9 percent), Ghana (36 percent), South Africa (35.6 percent) and Nigeria (32.2 percent) – emphasising the importance companies attach to safeguarding their financial data. Functionality and ease of use (17.6 percent), multiple payment options (13.5 percent) and speed (12.9 percent) follow, showing a preference for payment flexibility and quick transactions. Pricing (11.5 percent) and scalability (8.2 percent) are less prioritised, suggesting a focus on functionality and immediate needs.

“The increased adoption of digital solutions also implies a shift in workplace dynamics and positions finance professionals to add more value to their organisations. We are looking forward to playing a major role in the realisation of these opportunities and the delivery of technology solutions to support growth for businesses in Africa,” Oyetola adds.

Featured Image Credits: TechnoFAQ

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