Utilizing alternative payment methods: succeed in Kenya and Nigeria’s $15 billion eCommerce market
Africa can be an intriguing region for eCommerce markets. Especially countries such as Kenya and Nigeria, two of the biggest economies in the continent.
Africa can be considered one of the more intriguing regions for eCommerce markets. Especially countries such as Kenya and Nigeria, two of the biggest economies in the continent – thanks to the exponential growth of mobile money users.
Recent data from the Nigeria Interbank Settlement System shows the volume of transactions through mobile devices rose by 128.4%, from 67 million users in 2021 to 153 million at the beginning of 2022. The amount of mobile money users starkly contrasts the 1.6% of Nigerians who own a credit card. In 2022, the number of Kenyans using mobile money services increased by over 6 million (27%).
The expectation is that transaction volume will rise even further in Kenya and Nigeria, presenting an ongoing opportunity for multiple industries and merchants to acquire more consumers through localized payment methods.
eCommerce merchants looking to benefit in Africa must adapt and make localized and instant payment methods part of their go-to-market strategy. Having local operations or partners who know the landscape and a new market’s unique requirements and regulations is crucial to success.
Kenya in focus
Kenya is considered East Africa’s most populous region with 56 million people. The business-to-consumer (B2C) eCommerce market is expected to grow by 15.25% to reach $2.3 billion by the end of 2023.
Popular alternate payment methods in Kenya
- Mobile money: A payment method where just a smartphone is needed. The number of registered mobile money accounts has surpassed the number of people in Kenya. M-Pesa is the favored choice.
- Cash on delivery: where a buyer pays with physical money once goods are delivered.
Nigeria in focus
With under half of the Nigerian population owning an account with a banking institution, offering alternative payment methods (APM) is crucial to launching business operations in the region. As smartphone penetration grows, mobile-optimized checkout flows should be at the top of your list.
Popular alternate payment methods in Nigeria
- Mobile money: from providers such as Paga, a company offering free peer-to-peer (p2p) between a network of 19 million customers
- Verve: the first chip-card to be accepted across all Nigerian payment channels
- Bank transfers
Move your business forward in Africa
Kenya and Nigeria are two examples of emerging African economies experiencing a high growth rate thanks to developments in their payments landscape.
As new technology and digital payment channels continue to make their way into Africa, the young population is predicted to purchase more digitally and globally. These changes in payment practices require eCommerce merchants to invest in forward-thinking strategies that will drive long-term growth in the African market.
dLocal offers the most popular traditional and alternative payment methods in over 15 African countries and growing. Ensure high conversion rates for your future customers in Kenya and Nigeria by localizing your company’s checkout flow.