Yele Oyekola, CEO and co-founder of Duplo.

Nigeria trails Kenya and South Africa in developing key business-to-business (B2B) payment processes on the continent, including the adoption of electronic bank transfers, speed of processing invoices and payment automation.

This is according to the Exploring the State of B2B Payments in Africa report, produced by Duplo, a Nigerian-based B2B financial software firm.

The report, which is based on survey responses from more than 1,200 professionals from Kenya, Nigeria, South Africa and Ghana, found that South Africa leads the way in electronic bank transfers, with 49.1 percent choosing it as their preferred method to pay vendors. Nigeria was next (48.5 percent), followed by Ghana (34 percent) and Kenya (31.9 percent).

Kenya is ahead on payment automation, with 83.4 percent of Kenyans stating their payment system was either semi-automated or fully automated, compared to Nigeria (79.9 percent), South Africa (71.69 percent) and Ghana (67.23 percent).

On processing invoices timeously, it says South Africa has a slender lead, with 39.93 percent stating that it typically takes a day or less to process invoices compared with Nigeria’s 39.74 percent.

In a statement, Duplo says Africa’s B2B payment sector represents a significant, yet largely untapped opportunity.

“This is partly due to the complexity and larger transaction volumes associated with B2B payments. According to the World Bank, the continent’s share of the global B2B payment opportunity stands at $1.5 trillion. However, despite this promising potential, many businesses grapple with considerable payment delays and other issues with their payment processes that negatively impact their cash flow and slow their growth,” it says.

Duplo says in recent years, digital payment solutions have eased many of these challenges, but there are several issues to address in softening the flow of money between businesses in Africa.

For example, the company says security ranked as the most critical feature across the board for respondents when choosing B2B payment software, with 35.89 percent selecting it as the feature they valued the most.

It adds: “Across individual countries, security was also the top feature - Kenya (39.9 percent), Ghana (36 percent), South Africa (35.6 percent) and Nigeria (32.2 percent) – emphasising the importance companies attach to safeguarding their financial data.

“Functionality and ease of use (17.6 percent), multiple payment options (13.5 percent) and speed (12.9 percent) follow, showing a preference for payment flexibility and quick transactions. Pricing (11.5 percent) and scalability (8.2 percent) are less prioritised, suggesting a focus on functionality and immediate needs.”

Yele Oyekola, CEO and co-founder of Duplo, comments: “Despite various challenges, the future of B2B payments in Africa is set for dynamic growth and innovation, signalling a new era of opportunities and expansion for the continent's business ecosystem.

“The opportunity to automate accounts payable and receivable and transform other aspects of the B2B payments process offers potential to reduce payment delays, enhance cash flow and drive growth for businesses across the continent.

"The increased adoption of digital solutions also implies a shift in workplace dynamics and positions finance professionals to add more value to their organisations.”