A Cross-Country Evaluation of Sentiment Toward Digital Payment Systems in Africa

TL;DR

This study explores how users in Nigeria, Tanzania, and Zimbabwe choose and perceive various digital payment systems, highlighting tradeoffs in utility, privacy, and trust.

Contribution

It provides qualitative insights into user preferences and decision-making processes across different African countries regarding digital payment systems.

Findings

Users trust government for security but not for system reliability.

Most users have multiple accounts and choose platforms based on specific needs.

Tradeoffs between utility, privacy, and trust influence payment system choices.

Abstract

Digital payment systems have become a cornerstone of consumer finance in Africa. Prominent payment categories include money transfer applications, mobile money, cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs). While there are studies exploring how and why people use individual digital payment systems (both in Africa and beyond), we lack a good understanding of why people choose between different categories of payment systems, and how they view the tradeoffs between different categories. We conducted qualitative interviews in three African countries -- Nigeria, Tanzania, and Zimbabwe -- to understand how and why people use various payment systems, and what influenced them to start using these systems. Our study highlights several notable findings regarding tradeoffs between perceived utility, privacy, and security. For example, many users trust government issuers to protect them from scams, but they do not trust those same institutions to build reliable systems and products or prioritize customer satisfaction. We also find that most users have accounts on multiple payment systems, and conduct a complex selection process using different platforms for different types of payments. This selection process is driven in part by financial considerations, but also by security, privacy, and trust preferences. Our findings suggest compelling directions for regulators and the research community to design systems that balance users' trust and utility needs.