After COVID19, the world of digital payments has continuous innovations and rapid transformation. COVID19 has caused a massive spike in contactless and online payments worldwide.
Digital payments are evolving fast and have changed how we consume goods and services. It is convenient and quick, which are some of the advantages of the online world. More consumers are happy to use contactless payments, and those who had not before are now trying online shopping. They expect different payment methods, whether they are shopping on a mobile app or a browser. There are various options available for online payment methods.
Online Payments Methods in Africa
Online payment makes life easier and more convenient for your customers. It saves a time-consuming trip to the banks, and there is no waiting around for invoices to be paid.
Credit & debit cards
Credit cards and debit cards are the oldest and most popular payment methods worldwide. Credit cards are the most popular method of online purchases. Credit cards are more popular than debit cards because of extra features. For example, you can use rewards programs when spending with a credit card. In recent years the increasing use of credit and debit cards has been facilitated by the circulation of contactless cards. Many people are moving toward contactless cards due to their convenience and ease.
Mobile payment is a digital wallet on your phone. In this digital age, many people prefer to pay with smartphones. You can securely add your bank details and pay in a mobile wallet app with your mobile device.
Bank transfer is the most secure way to pay online; it involves customers paying from their bank accounts. For example, if you choose a bank transfer payment option in the checkout, it redirects the user to their internet banking portal, where they authorize the transaction.
Prepaid cards are another online payment method; it is helpful for minors or those who don’t have a bank account. A prepaid card is a debit card. You can purchase from any supermarket or convenience store. There is no credit involved in a prepaid card, and you can use it anywhere on a particular card network-Mastercard, Visa, Discover, or American Express.
Local eCommerce payment methods
Targeting a global audience is essential while understanding the online business. However, to understand the local markets, you must understand how preferences vary in each region. For example, some regions prefer cards, whereas, in others, the eWallet is king.
Advantages and Challenges of Online Payments for small businesses in Africa
Here are some of the advantages and disadvantages of online payment for small businesses in Africa.
Advantages of online payment in Africa
● Saves time and money
Moving to online payments for small businesses will reduce the cost in an automated safe environment for the customers. In addition, cash flow management will be organized, resulting in reduced costs.
● It helps in reaching a global audience
It helps achieve a global audience, which results in an increase and expansion in sales. It directly impacts the profit and overall growth of your business.
● Gives a better customer experience.
Online payments allow customers to make purchases in different ways, such as credit cards or debit cards. They can shop with ease at whatever time of the day they prefer. It can lead to happy and returning customers.
● Online payments are appealing to impulse buyers.
Making your online store more appealing to the customers by offering free delivery and free upgrades can appeal to impulse buyers.
Challenges of online payment in Africa
Accepting online payments can also create challenges for you and your customers. Here are some potential challenges faced by the merchants when offering online payment
● Handling fraud
Handling fraud is the biggest challenge of online payments, and the providers need to look for a better solution to improve online security. In this modern era, online spending has increased, and so have fraud attempts in the field. It is estimated that $22billions was lost globally and could reach higher in 2023.
● Technical problems
Online payments can have some downtime and disturbances, which causes inconvenience among shoppers. It is a common issue among systems that depend on technical infrastructure.
● Increased Costs
Maintenance of e-payment systems can drive up costs for your business. There is always an extra cost to maintain and install the designs. You also need to protect sensitive data in your infrastructure against unauthorized access.
● Disputed transactions
The disputed transaction is also one of the main challenges of online payments. You can try to file for a refund if someone else has used your card. But, without information about the person who used your card, it may be challenging to prove your claim, which means that you may not get a refund.
You have to address the challenges that come with online payments. Online payment should be easy and secure transactions for the customers. Finding the right payment gateway can bring efficiency to your business.