Nigeria trails South Africa and Kenya in the development of key B2B payment processes across Africa, according to a new report from Duplo. The business payment platform for African businesses’ report shows that this includes the adoption of electronic bank transfers, speed of processing invoices and payment automation.
The Exploring the State of B2B Payments in Africa report surveyed opinions of more than 1,200 professionals from Kenya, Nigeria, South Africa and Ghana. It reveals that South Africa leads the way in electronic bank transfers, with 49.1 per cent choosing it as their preferred way to pay vendors. Nigeria takes second place with 48.5 per cent, and Ghana third with 34 per cent. Comparatively, only 31.9 per cent of Kenyans choose it as their preferred way to pay.
Kenya leads the way in payment automation, with 83.4 per cent of Kenyans stating that their payment system was either semi-automated or fully automated. This is compared to Nigeria (79.9 per cent), South Africa (71.69 per cent) and Ghana (67.23 per cent). When it comes to the speed of processing invoices, South Africa has a slender lead. 39.93 per cent state that it typically takes a day or less to process invoices compared with Nigeria’s 39.74 per cent.
An untapped opportunity
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 $1.5trillion. However, despite this promising potential, many businesses grapple with considerable payment delays and other issues with their payment processes. These problems negatively impact their cash flow and slow their growth.
In recent years, digital payments solutions have eased many of these challenges. Nonetheless, to ease the flow of money between businesses in Africa, there is still a way to go.
For example, security ranked as the most critical feature across the board for respondents when choosing B2B payment software. 35.89 per cent select it as the feature they value the most.
Prioritisation across the region
Across individual countries, security is 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). This emphasises 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 per cent) 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.
According to Yele Oyekola, CEO and co-founder of Duplo: “Despite various challenges, the future of B2B payments in Africa is set for dynamic growth and innovation. It signals a new era of opportunities and expansion for the continent’s business ecosystem.
“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.
“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.”
