Nigeria’s B2B payment system lag in Africa

According to a recent analysis from Duplo, Nigeria lags behind South Africa and Kenya in the development of crucial B2B payment systems throughout Africa. According to the research on the business payment platform for African enterprises, this includes the use of electronic bank transfers, the speed at which invoices are processed, and payment automation.

Over 1,200 professionals from Kenya, Nigeria, South Africa, and Ghana were asked for their thoughts as part of the Exploring the State of B2B Payments in Africa report. With 49.1% of respondents preferring electronic bank transfers as their preferred method of paying suppliers, it becomes clear that South Africa is the market leader in this area. Ghana comes in third with 34%, followed by Nigeria in second with 48.5%. Comparatively, only 31.9% of Kenyans choose it as a method of payment.

With 83.4% of Kenyans reporting that their payment system is either semi-automated or fully automated, their country is at the forefront of payment automation. This is in contrast to Ghana (67.23%), South Africa (71.69%), and Nigeria (79.9%). South Africa has a slim lead in terms of processing invoices quickly. Compared to Nigeria’s 39.74%, 39.93% report that processing bills normally takes a day or less.

Unexploited potential

The B2B payments market in Africa presents a huge but mostly unexploited opportunity. B2B payments’ complexity and higher transaction volumes are partially to blame for this.

The World Bank estimates that the B2B payment opportunity for the region is $1.5 trillion. Nonetheless, many firms struggle with significant payment delays and other problems with their payment procedures in spite of this encouraging potential. These issues have a detrimental effect on company cash flow and limit their expansion.

Digital payment options have made many of these difficulties easier in recent years. But there is still work to be done to make it easier for money to move between firms in Africa.

For instance, security was consistently rated as the most important aspect when choosing B2B payment software by respondents. It is the trait that 35.89% of respondents say they appreciate the most.

Setting priorities across the region

Security is the top feature in all individual nations, including Kenya (39.9%), Ghana (36%) South Africa (35.6%), and Nigeria (32.2%). This underlines the value businesses place on protecting their financial data.

Multiple payment alternatives (13.5%), functionality and simplicity of use (17.6%), and speed (12.9%) are next, indicating a preference for flexible payment methods and swift transactions. Pricing (11.5%) and scaling (8.2%) are given less weight, indicating an emphasis on functionality and urgent demands.

Yele Oyekola, the CEO and co-founder of Duplo, asserts that despite a number of obstacles, the future of B2B payments in Africa is poised for explosive development and innovation. It heralds the beginning of a brand-new age of possibilities and growth for the continent’s commercial ecosystem.

“The possibility to automate accounts payable and receivable and reform other elements of the B2B payment process has significant potential to decrease payment delays, improve cash flow, and spur business growth throughout the continent.

“The rising use of digital solutions also signals a change in the dynamics of the workplace and puts financial professionals in a better position to benefit their organizations. We are looking forward to having a significant impact on how these potential are realized and how technological solutions are provided to promote corporate growth in Africa.