Africa: Digital Payment Adoption Surges in Nigeria and Other African Nations, Reaching 46%

The penetration of digital payments in Nigeria and various African countries has experienced significant growth, soaring from 23% to 46% in less than eight years. This surge is playing a pivotal role in propelling the expansion of digital commerce, as highlighted in a study titled ‘Beyond Borders’ conducted by EBANX.

The digital payments firm revealed that emerging economies such as Brazil, India, Kenya, and Nigeria are actively contributing to the global digital market’s growth by fostering a surge in online purchases facilitated by instant payments, transfers, and other alternative payment methods.

While acknowledging the resilience of cards in the digital payments landscape, the study emphasized that a substantial number of new consumers (34 million) embracing digital payments are expected to come from India.

The report indicated that both Africa and Latin America are on track to witness the total value of their digital commerce markets surpassing $1 trillion by 2026, driven by a general increase in consumer participation.

Paula Bellizia, President of Global Payments at EBANX, explained, “There is a solid demographic reason for this: rising economies have a young and growing population, contrasting developed regions. In addition to the demographic and economic push, rising economies largely benefit from digitisation.”

The study underscored that digital commerce is growing at a robust rate of 13% to 20% per year in more established markets like the U.S. or Europe, while experiencing even faster expansion in emerging economies.

Highlighting Africa as an early adopter of digital payments, the report anticipated that the continent, with an estimated adult population of 1 billion by 2030, would become a crucial region for the digital growth of commerce and payments.

EBANX stated, “Africa is now on the verge of its next big leap: digital commerce, fueled by cell phone penetration rates and the constant adaptability of local, alternative payment methods to the online world, like mobile money, which reached almost universal penetration in countries like Kenya.”

Providing insights into specific countries, the study noted that 42% of Kenyan businesses and 63% of Indian businesses already engage in online purchases. Looking ahead, rising markets in Latin America, Africa, and Asia-Pacific are expected to constitute 40% of the total value of global B2B payments made online by 2027.

Despite this surge in digital payments, a significant portion of B2B transactions (estimated at 70%) still follows traditional manual processes, lacking more seamless flows, according to Capgemini.

In Nigeria, digital payments have witnessed substantial growth, with electronic gateways being used 1.35 billion times in March 2023, marking a notable increase from 901.46 million times in February 2023. Cashless transactions also recorded a significant growth of 44.84%, reaching N126.73 trillion in the first quarter of 2023 compared to N87.49 trillion in the same period of 2022.