Innovation and technology have brought transformative changes to various aspects of our lives, and the payments landscape is no exception.
We are currently witnessing the dawn of a new era in digital payments, offering unparalleled convenience, security, and efficiency. Card payments, for example, have undergone an evolution in the last few decades paving the way for consumers to have a more seamless experience while enjoying the convenience of zero charges associated with it.
Digital payments have also played a pivotal role in the government’s pursuit of achieving a cashless economy. According to the quarterly financial stability review, the largest share of digital payments was recorded for the year ending in 2022, reflecting a growth of 22.02%. The number of digital payment transactions increased from 2.74 million in 2021 to 3.34 million in 2022.
Moreover, digital payments often come with reduced transaction fees compared to their traditional counterparts, a money-saving grace for many Ugandans. In a society where every shilling counts, these cost savings can make a tangible difference in people’s lives. This can manifest through flexibility in financial management, making transactions, and accessing financial services.
Digital payments don’t just benefit consumers — they also stimulate economic growth, creating a virtuous economic cycle whereby increased consumption leads to increased production, more jobs, greater income, and, ultimately, stronger economic growth.
In fact, a study conducted by Moody’s Analytics and sponsored by Visa analyzed the impact of electronic payments on GDP in 70 countries and regions in the five years between 2015 and 2019 and found that greater usage of electronic payment products added $245bn to real GDP in the 70 countries.
As the use of cash falls, central banks spend less on handling, printing, transporting, and safeguarding notes and coins, improving overall efficiency. Consequently, expanding and improving digital payments makes a marked difference in cash displacement.
However, despite the gains there is still much to do — and tremendous opportunity to realize. More than 500 million consumers and more than 40 million merchants in Africa still lack access to financial services, losing out on the benefits that can come with secure, convenient, and reliable digital payments.
As a global network, Visa has been uniquely positioned to drive innovation in several key areas that we see as catalysts for growth and inclusion.
A great example is our Tap to Phone solution which we recently introduced that can empower millions of merchants by turning their smartphones into POS devices. In the Central Europe, Middle East, and Africa region, Visa already has 144,0000 enabled devices and in 2022, facilitated 3.6 million transactions.
As part of our commitment Visa also recently signed an MoU with the Uganda Bankers Association to accelerate the uptake of contactless payment solutions which provide a safe, secure, and convenient way for consumers to make transactions by simply tapping their payment cards or mobile devices on contactless-enabled payment terminals.
As digital payments keep evolving, our commitment as Visa is to continuously work with our partners to help realize its benefits by developing product offerings and technology that meet local needs while identifying and addressing new risks.
Editor’s Note: This opinion article was provided to PC Tech Magazine for publishing by Salma Ingabire, the Visa Country Manager in Uganda.