A recent report from Duplo, a business payment platform serving African businesses of all sizes, has shed light on the development of key B2B payment processes in Africa.
The report reveals that Nigeria trails behind South Africa and Kenya in critical areas such as the adoption of electronic bank transfers, speed of processing invoices, and payment automation.
South Africa Leads in Electronic Bank Transfers
The “Exploring the State of B2B Payments in Africa” report is based on insights from over 1,200 professionals surveyed in Kenya, Nigeria, South Africa, and Ghana.
According to the findings, South Africa leads the way in electronic bank transfers, with 49.1 percent of respondents choosing it as their preferred payment method for vendors.
Nigeria follows closely with 48.5 percent, while Ghana and Kenya stand at 34 percent and 31.9 percent, respectively.
Kenya Excels in Payment Automation
In terms of payment automation, Kenya takes the lead, with an impressive 83.4 percent of Kenyans stating that their payment systems are either semi-automated or fully automated.
Nigeria follows at 79.9 percent, South Africa at 71.69 percent, and Ghana at 67.23 percent.
However, when it comes to the speed of processing invoices, South Africa holds a slender lead, with 39.93 percent reporting that it typically takes a day or less to process invoices, compared to Nigeria’s 39.74 percent.
Untapped Opportunities in Africa’s B2B Payment Sector
Africa’s B2B payment sector presents a significant opportunity, estimated at $1.5 trillion, but remains largely untapped due to the complexity and higher transaction volumes associated with B2B payments.
Despite the potential, many businesses still face considerable payment delays and other issues that adversely affect their cash flow and growth.
Digital payment solutions have started to address these challenges, but there are still unresolved issues that hinder the smooth flow of money between businesses in Africa.
Key Features and Priorities for B2B Payment Software
Security emerged as the most critical feature for respondents when selecting B2B payment software, with 35.89 percent considering it the top priority.
This preference for security was consistent across individual countries – Kenya (39.9 percent), Ghana (36 percent), South Africa (35.6 percent), and Nigeria (32.2 percent) – highlighting the importance businesses place on safeguarding their financial data.
Functionality and ease of use (17.6 percent), multiple payment options (13.5 percent), and speed (12.9 percent) were other key considerations, indicating a preference for payment flexibility and swift transactions.
Pricing (11.5 percent) and scalability (8.2 percent) were of lesser priority, suggesting a focus on functionality and immediate needs.
The Bright Future of B2B Payments in Africa
Yele Oyekola, CEO, and co-founder of Duplo, expressed optimism about the future of B2B payments in Africa.
Despite challenges, the continent’s business ecosystem is poised for dynamic growth and innovation.
The automation of accounts payable and receivable, along with advancements in other aspects of the B2B payments process, holds great potential to reduce payment delays, enhance cash flow, and foster business growth.
As digital solutions gain more adoption, workplace dynamics will shift, empowering finance professionals to add greater value to their organizations.
Duplo is committed to playing a significant role in realizing these opportunities and providing technology solutions to support businesses across Africa in their growth journey.
