How digital payments benefit consumers and the economy

Innovation and technology have brought about changes in various aspects of our lives, and the payment landscape is no exception.

We are currently witnessing the dawn of a new era in digital payments that offers unparalleled convenience, security and efficiency.

Card payments, for example, have undergone an evolution over the past few decades, paving the way for consumers to have a more seamless experience and enjoy the convenience of zero associated fees.

Digital payments also play an important role in the government’s drive to achieve a cashless economy.

According to the Quarterly Financial Stability Review, digital payments have recorded the largest share in the year ending 2022, reflecting a growth of 22.02 percent.

The number of digital money transactions increased from 2.74 million in 2021 to 3.34 million in 2022.

Also, digital payments often come with reduced transaction fees compared to their traditional counterparts, a money-saving boon for many Ugandans.

In a society where every shilling counts, these cost savings can make a tangible difference to people’s lives.

This manifests through flexibility in financial management, transactions and access to financial services.

Digital payments don’t just benefit consumers – they stimulate economic growth, creating a virtuous economic cycle whereby increased consumption leads to increased productivity, more jobs and higher incomes, and ultimately stronger economic growth.

In fact, a study conducted by Moody’s Analytics and funded by Visa examined the impact of electronic payments on GDP in 70 countries and territories over the five years between 2015 and 2019, and found that increased use of electronic payment products added $245b to real GDP. In 70 countries.

And as the use of cash decreases, central banks spend less on handling, printing, transporting and protecting notes and coins, improving overall efficiency.

As a result, expanding and improving digital payments is making a significant difference in money transfers.

However, despite the gains there is still much to do – and huge opportunity to realize.

Over 500 million consumers and over 40 million merchants in Africa still lack access to financial services, missing out on the benefits that can come from safe, convenient and reliable digital payments.

As a global network, Visa is uniquely positioned to innovate in many key areas that we see as catalysts for growth and inclusion.

A good example is the recently launched Tab to Phone solution, which will empower millions of merchants by turning their smartphones into point-of-sale (POS) devices.

In the Central Europe, Middle East and Africa region, Visa already has 144,0000 enabled devices and by 2022, will have facilitated 3.6 million transactions.

Visa recently signed a Memorandum of Understanding (MoU) with the Uganda Bankers Association – enabled payment terminals.

Ms. Salma Ingabre is the Visa Country Manager for Uganda