On 17 March, AFI and Visa, through the AFI Public-Private Dialogue (PPD) platform, brought together 100 AFI members in Victoria, Seychelles for a training session on ‘Small Merchant Acceptance: A Path to Financial Inclusion’. The one day workshop provided participants with an overview of the challenges in promoting a wider adoption of digital payments by merchants, a review of current digital payment systems and an understanding of the relationship between financial inclusion, cash and the gender gap.

Visa’s Country Manager for Seychelles, Shema Sebgoya, welcomed participants to the workshop and reaffirmed Visa’s commitment to serving the unbanked and underserved.

This was followed by the opening presentation by Visa’s Senior Director for Governments and Partnerships, Amira Tirana, who provided an overview of current financial inclusion progress and highlighted the ongoing challenges of the gender gap and the continuing reliance on the use of cash. “In emerging markets, cash is king. But cash has a higher economic cost, while digital payments drives economic growth, increases financial inclusion, reduces the shadow economy and enables digital commerce,” said Ms. Tirana. In an interactive exercise with the participants, AFI members identified the key challenges in promoting digital financial services for financial inclusion as affordability, acceptance, trust, financial education and payment infrastructure.

In the second session, Majeed Hujair, Senior Director, Visa School of Public Policy, led a discussion on digital and small merchant acceptance in AFI member countries, during which he challenged participants to learn from each other about the varying levels of progress and barriers to progress of digital retail payments in AFI member countries. This was followed by a presentation by Mr. Hujair on digital payment systems. Mr. Hujair highlighted the three pillars of a payment network framework. They were efficient and transparent rules and regulations, reliable and secure robust system infrastructure, and a strong brand to encourage adoption. The strength of a payment system depends on the interaction between them.

The afternoon sessions started with a presentation by Visa’s Senior Director for Global Merchant Sales and Solutions, David Whitelaw, who shared their key learnings on accelerating digital payment acceptance among small merchants. “Rates of electronic payment acceptance are low because the value proposition is not compelling,” said Mr. Whitelaw. He shared that cost, speed and security mattered most to small merchants when considering adopting digital payment systems.

The final session saw participants engage in group work, with breakout discussions to help participants understand the varying digital payment needs that different types of micro and small merchants have. Groups also discussed the barriers to creating usage and practical actions that they could take to accelerate acceptance and use of digital payments by small merchants in different market segments.

At the conclusion of the day, participants were left with a solid overview of challenges and opportunities that come with micro and small merchant acceptance of digital payments. Effie Graham, from the Bank of Ghana noted the importance of multi-stakeholder commitment, saying ‘There has to be an understanding, phasing and national intent. An initial significant investment may be expected to come from the government and there needs to be a clear partnership between the government and private sector because once it is entrenched, it will be around for the rest of our lives’.

AFI’s next PPD activity will take place in Maputo, Mozambique on 9-10 May 2017, in a training session set to explore digital approaches to enhancing financial inclusion.