Dar es Salaam. Visa (NYSE: V), a global leader in payments, launched its report titled “Value of Acceptance: Understanding the Digital Payment Landscape in Tanzania” on Monday this week, revealing a remarkable shift in the financial landscape:
Going by the report, 84 percent of surveyed Small and Medium-Sized Enterprises (SMEs) have adopted digital payments within the past two years.
This rapid transition is driven by lower fraud risks and increased customer convenience, signaling a significant evolution in how businesses engage with their customers, according to Mr Chad Pollock, the Vice President and General Manager for Visa East Africa.
The report highlights the growing importance of digital payments among SMEs, with over 50 percent of those with a presence on e-commerce platforms now accepting digital payments.
“This reflects a vibrant ecosystem that fosters business growth,” underscored Mr Pollock.
“The research findings paint a promising picture of Tanzania’s growing digital payments landscape.
“The benefits for businesses, consumers, and the broader economy create a powerful opportunity for growth. Visa is committed to working with our partners across the ecosystem to unlock the full potential of digital payments for all in Tanzania.”
The report underscores a significant opportunity to introduce digital payment solutions that offer convenience comparable to cash, such as ease of refunds, along with enhanced security.
By emphasizing these key attributes, the report suggests that both merchants and customers can be encouraged to incorporate digital payments.
This opportunity is further emphasized by the growing awareness among SMEs of the limitations of relying solely on cash transactions.
The report indicates that over 30 percent of cash-only businesses have experienced lost sales or transactions because customers did not have sufficient cash on hand.
This demonstrates an increasing recognition of the benefits of diversifying payment options and providing digital alternatives.
Most digitally enabled SMEs recognize the critical role that digital payments play in driving growth, with 64 percent considering the acceptance of card payments a strategic investment for the future.
However, the report also identifies challenges, noting that 47 percent of merchants have faced technical issues, such as payment failures, and the high cost of acquiring POS terminals remains a significant barrier.
Additionally, over 30 percent of cash-only businesses reported lost sales due to customers lacking sufficient cash, highlighting the necessity for diversified payment options.
This growing awareness presents an opportunity for merchants to provide digital alternatives that enhance security and convenience, such as easy refunds.
To further promote digital payment adoption, the report recommends educational campaigns aimed at shifting consumer behavior and increasing awareness of the benefits of these methods.
The advantages of adopting digital payments for Tanzanian SMEs are substantial.
By accessing a wider, increasingly cashless customer base, businesses can boost revenue and enhance customer satisfaction through faster transactions.
Additionally, digital transaction records can facilitate access to financing, stimulating overall growth.
The economic implications are significant, with research indicating that transitioning to a digital economy could generate 1-2 percent annual GDP growth.
A mere one percent increase in card usage could result in an average $67 billion annual rise in goods and services consumption across 70 countries and territories.
Visa is well-positioned to support Tanzania’s transition to a more digital economy.
As a trusted partner, Visa offers a range of solutions to assist governments, financial institutions, businesses, and technology providers in enhancing their digital payment acceptance maturity, including tailored programs and innovative solutions like Tap to Phone, Contactless Payments, and Click to Pay.
