Kenyans Whet Appetite For Digital Payments

When Covid19 was declared a global pandemic in 2020, different governments introduced lockdown forcing consumers to shift their spending habits to embrace contactless tap-and-go payments and online shopping. As stores closed and social distancing took hold, retailers worldwide moved their businesses online, embraced e-commerce, and explored the potential of new ways to pay. More than a year later, research from Mastercard shows that the adoption of new payment technologies is rising, and consumer appetite for new, fast and flexible digital experiences continues to grow.

The Mastercard New Payments Index shows that 99 per cent of Kenyan consumers will consider using at least one emerging payment method, such as cryptocurrency, biometrics, contactless, or QR code, in the next year.

Over three-fourths of respondents (77 per cent) agree they have tried a new payment method they would not have tried under normal circumstances, but the pandemic has galvanized people to try flexible new payment options to get what they want when they want it. With this interest and consumer demand also comes a greater expectation for businesses to provide multiple ways to shop and pay. In fact, 88 per cent of Kenyan consumers say they are more excited about shopping at retailers who offer the latest payment methods. Additionally, 81 per cent Kenyan consumers say that digital payment methods help them save money.

“The pandemic made us think differently, partly out of necessity,” said Craig Vosburg, Chief Product Officer at Mastercard. “To deliver the choice and flexibility that consumers need – and increasingly expect –retailers worldwide need to offer a range of payment solutions that are easy to access and always on. As we look ahead, we need to continue to enable all choices, both in-store and online, to shape the fabric of commerce and make the digital economy work for everyone.”

Contactless technology was the digital catalyst to explore new payment options because of its fast, secure, and touch-free experience. Between the first quarter of 2020 and the same period in 2021, more than 100 markets saw contactless as a share of total in-person transactions grow by at least 50 percent. A year into the COVID-19 pandemic, contactless is showing its staying power and dynamism – in the first quarter of 2021 alone, Mastercard saw 1 billion more contactless transactions worldwide as compared to the same period of 2020.

All signs point to a continued growth path for contactless, with nearly 7 in 10 consumers globally anticipating using a contactless card this year.

“The world as we now know it has changed dramatically since the outbreak of the pandemic, accelerating long-term shifts in consumer transactions and payment methods. We continue to work with our merchants, fintechs, and banking partners to rapidly innovate payment options that meet consumer needs while ensuring we drive financial and digital inclusion,” said Raghav Prasad, Division President, Mastercard, Sub-Saharan Africa.

Looking to the future, digital currencies and wallets, wearables, biometrics, contactless, and QR codes are trending as emerging payments technologies as people’s comfort with them and understanding of them increases and the use of cash decreases. In fact, 96% of consumers in Kenya have more ways to pay compared to this time last year. The exploding interest in new payment technologies may encourage businesses to expand their options at the checkout.

The Mastercard New Payment Index found

Cryptocurrency1 Gains Ground – Today consumers can buy, sell, and trade cryptocurrency as a commodity or investment. Consumers are also increasingly showing interest in being able to spend crypto-assets for everyday purchases. As global interest in digital currencies continues to accelerate, 4 in 10 people (43 per cent) in Kenya say they plan to use cryptocurrency in the next year, with more than two-thirds (69 pder cent) noting they are more open to using it than they were a year ago.

While consumer interest in cryptocurrency – especially floating digital currencies such as Bitcoin – is high, work is still required to ensure consumer choice, protection, and their regulatory compliance. Earlier this year, Mastercard announced that it will start supporting select cryptocurrencies directly on its network.

Biometric Payments are More Trustworthy – Perceptions of safety and convenience have been front and center for people over the past year. 42 per cent of Kenyan consumers say they plan to use biometric verification methods like gait or walk assessments and fingerprint authorization. In fact, nearly 7 out of 10 people (69 per cent) feel safer using biometrics to verify a purchase than entering a pin.

QR Codes are Cleaner and More Convenient – Growing markets are leveraging QR-based options as a clean and convenient way to interact with merchants. Consumer desire for clean and convenient ways to pay will remain post-pandemic. 54 per cent of people in Kenya expect to use more payment technologies like QR codes in the next year. Consumers also find that that QR codes are cleaner (85 per cent) and more convenient (83 per cent) for in-person payments and have a significant potential to reduce cost of payment acceptance and increase financial inclusion.

Digital Wallets Surge in Popularity – Kenya is seeing a surge in the popularity of digital wallets. 77 per cent of Kenyan consumers said they were likely to use digital wallets next year. 67 per cent of shoppers even say that they feel safer storing their card information in one place such as a digital wallet. To Meet People’s Demands, Businesses Forced to Jump into Emerging Payment Trends.

With consumer interest around new payment technologies, the expectation for businesses to adapt for the long-term is here to stay. Over eight in ten Kenyan consumers (87 per cent) say that they would shop at small businesses if they offered more payment options, and 88 per cent noted being more excited to shop at retailers that can offer the latest payment methods, and an equal proportion (88 per cent) said they would be more loyal to retailers who offered multiple payment options.

This behavior shift is reinforced by the desire for consumer choice – with 93 per cent saying that they expect to make purchases when they want and how they want. The businesses that can provide multiple ways to shop and pay are best positioned to meet these expectations. As the demand for emerging payments and choice continues, it requires a wider range of payment solutions, insights, and products to meet the accelerating enthusiasm for the future state of pay.