Cash only Small and Medium Enterprises (SMEs) are losing business due to the complexity of and lingering security concerns around digital payment systems, according to the Visa Value of Acceptance report.
- 56% of surveyed cash-only SMEs in Kenya report losing business due to customers not carrying cash, while 91% face cash-related security concerns such as robbery and employee embezzlement.
- Among SMEs accepting digital payments, there is a strong demand for secure B2B payment solutions (71%) and guidance on payment security best practices (69%).
- Research shows that the transition to the digital economy can generate 1-2% annual GDP growth; a mere 1% increase in card usage generates an average $67 billion annual increase in goods and services consumption across 70 countries and territories.
“While the outlook for digital payments in Kenya is positive, several barriers hinder more widespread adoption among SMEs. These include apprehensions about the perceived complexity of digital payments compared to cash (highlighted by 36% of merchants). Furthermore, security concerns remain a significant barrier, even for SMEs already accepting digital payments,” according to the report released in Nairobi on Thursday.
E-payments are crucial for Kenyan SMEs, boosting revenue through a wider, increasingly cashless customer base, improving customer satisfaction with faster payments, and reducing operational risks by minimizing cash handling. Digital transaction records also provide valuable data that facilitates access to financing, thereby stimulating growth.
“Kenya’s digital payments landscape is experiencing a dynamic growth, fueled by a rising preference for innovative payment methods and value-added services that provide enhanced security and streamline operations” Chad Pollock, VP and General Manager, Visa East Africa stated. “This shift presents a significant opportunity to boost both individual prosperity and broader economic development.”
Beyond direct benefits, e-payment adoption drives economic growth and financial inclusion, connecting the unbanked to the formal financial system and enabling access to savings, credit, and insurance.
The report highlights Kenya’s accelerating path toward broader payment acceptance, with 40% of SMEs having adopted digital payments in the last two years. SMEs cite convenience (40%), cost savings (38%), and improved efficiency (37%) as key drivers for making the switch.
