2023 Payment Landscape Outlook | Kenya
As we enter the new year, there are some key factors which could affect the payments landscape in Kenya. While currently recovering from uncertainties surrounding national elections in August, we still could expect the region to be the fastest-growing economy in Africa during 2023, with The World Bank projecting a 5% GDP growth. This was reduced slightly from 5.5% after economic struggles with inflation, drought, and an ongoing fuel price rise. These challenges may provide an opportunity for businesses to identify alternatives to strengthen their financial infrastructure and market growth, which aren’t involving traditional banks. Read on to see what to expect in Kenya’s payments landscape.
Rise of the wallet
Kenya has shown strong growth in the e-payments market, contributing to Africa’s predicted growth of 152% between 2020 and 2025. Electronic transfers, cards, and digital wallets look to be increasingly popular for both consumers and businesses into the new year. Digital wallets are a dominant method to pay as bank accounts typically face restrictions and challenges with only 58% of Kenyans having a bank account. Having a digital wallet allows for faster and more secure transactions on a global scale. Find out more about the benefits of digital wallets.
2023 will bring a further push towards modern technology that facilitates a real-time payments infrastructure that can mend the flaws with offline channels and cash payments. Kenya is one of the ten countries expected to have the fastest growth in real-time payments so upgrading the current financial infrastructure can help boost smoother transactions, as well as integration of your business’ payments ecosystem. Utilising an API with webhooks allows for instant notifications when there’s an update on payments or FX orders. Explore the intelligent automation that the Verto API has to offer and why it can help provide endless possibilities to improve your business.
Embedded finance for seamless payments
A key theme for 2023 looks to be the rise of embedded finance into developing markets such as Kenya. According to Emmanuel Obinne, head of growth & partnerships, West Africa at BPC, “a largely unbanked population means that more smartphone penetration and digital adoption have made embedded finance the next leapfrog opportunity in Africa”.
By moving towards non-traditional banking products, Kenyans may have the opportunity to take advantage of innovative, convenient and cost-effective solutions to cross-border payments. Embedded finance addresses the common problems that legacy banking products could face, including poor technology and inefficient processes. A single intuitive platform with innovative non-traditional banking products offers Kenyans the flexibility to make fast cross-border payments at a low cost. This will likely be especially prominent in the travel and tourism sector. According to Julius Thairu, the chief commercial and customer experience officer for Kenya Airways,“the implementation of a cashless system helps to support the customer shift and preference to cashless transaction and will ease cash collection and reconciliation issues at the airports ensuring efficient services to customers.”
2023 looks to be an exciting year for Kenya’s payment landscape as innovative products continue to grow more accessible, creating more opportunities for business growth and a better payments experience.
Explore Verto’s Solutions today to see how we can help your business grow and overcome common market challenges in 2023. Read our CEO and co-founder, Ola Oyetayo’s reflections on 2022 and what trends he expects to see going into 2023.
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