Economy in for digital boom: E-payments to hit US$1.3bn by 2025
THE economy is in for a digital payments boom as more people switch from cash-based transactions to electronic (e) commerce that are settled electronically.
The rising momentum in e-commerce transactions has led to a strong growth in the amount of transactions that are settled online, with estimates showing that the figure could more than double by 2025.
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The Country Manager of Visa, Adoma Owusu, said at the Graphic Business/Stanbic Bank Breakfast Meeting on E-services last week that E-commerce sales in Ghana was projected to hit US$1.3 billion by 2025
Ms Owusu said about US$638 million was spent on goods and services last year and estimates now show that the figure will rise by 19 per cent to US$759 million in 2022.
The digital technology expert was the chairperson at the thought leadership event that was held on the theme: ‘Integration of E-Service into our economy - Implications for economic growth and quality of life.”
Experts say the increment in E-commerce will create more jobs for the youth in the technology space, grow businesses in the digital space as well as reduce the burden of printing money.
Phenomenal growth
She said E-commerce had seen a phenomenal growth across the world within the last 10 years, with e-sales expected to rise to US$30 trillion across the globe by 2024.
Ms Owusu said this phenomenal growth provided a huge market opportunity for players in the industry.
She noted that sub-Saharan Africa might be one of the smallest e-commerce regions but had showed a huge growth potential.
The Visa Country Manager said the established foundation intertwined with the growing e-commerce penetration offered payment and issuers new opportunities.
Adoption opportunity
Ms Owusu who was the Chairperson for the event, also pointed out that a research conducted by Visa over the last 24 months identified key macro-economic and demographic trends that would reinforce the growing digital adoption going forward.
“There is also great technological adoption and with the young growing population, it provides the impetus for the rise in opportunities of E-commerce in sub-Saharan Africa,” she stated.
She said the Groupe Speciale Mobile Association (GSMA) which is a mobile industry expert was also projecting that the number of mobile subscriptions in sub Saharan Africa would more than double and reach one billion connections by 2024, up from the 447 million in 2019.
This, she said, also provided huge opportunities, as customers would seek to have seamless access to making digital payments on mobile devices.
“The digital players must therefore ensure that there is a variety of payment channels available. Customers want options so digital payments must respond with multi-channel options,” she stated.
Make cross border transactions seamless
Ms Peprah also called for the need for players in the industry to make cross border transactions seamless.
She said e-commerce in the region was being driven by cross border transactions and to make the best out of it, these transactions must be enabled from a point of issuance to the point of acquiring.
“We also need to cater for the locals. While global cross border merchants play a key role, local sub-Saharan Africa merchants are rising and so there is an opportunity to support these players, but not only providing digital payment support but broader merchant value added services,” she explained
The Country Manager also urged players in the industry to keep the customers at the center of their product designs.
“Digital enables providers to personalise their products and making the best out of this opportunity will mean that providers can create the best customer experience for customers,” she stated.
Increasing usage
Also speaking at the event, Technology Planner in the Digital Financial Services Industry, Fred Frimpong, said it was necessary for the country to be deliberate about putting in place the right structures to help increase the usage of E-commerce platforms in the country.
“We have to be very deliberate in making sure that the many systems that we have put in place are being used. If there are policies on refund and returns that allow customers to get products they do not like returned, then it will encourage usage.
“If we have a system by which I can sit in the Western North, order a product, get it delivered to me without the delivery guy calling me up and down, and if I do not pick the item is returned, then we can be sure of increased usage,” he stated.
Mr Frimpong also indicated that the country needed a consumer protection system that worked, such that if consumers did not like the products they bought, they could be returned.
He said until such efforts were made, usage of E-Services would be low, stunting its impact on the economy.