A study on the challenges and opportunities of implementing digital payment in logistics business across Africa

Abstract

This research uses GIG Logistics as a case study to examine the challenges and opportunities of implementing digital payment systems in the African logistics sector, particularly for cross-border commerce. While digital payments offer potential efficiency and financial inclusion benefits, many African logistics companies encounter significant adoption barriers. The study aims to understand these challenges by identifying the main obstacles to digital payment adoption in Africa's logistics industry. The research draws on literature about digital payment systems, technological advancements, and their impact on logistics. Technologies like Blockchain and AI can enhance transaction speed and security. The literature also highlights the role of digital payments in cross-border trade, emphasizing benefits such as reduced costs and increased efficiency. However, regulatory, technical, and socio-economic barriers limit adoption in developing countries. A quantitative survey was conducted with 30 GIG Logistics employees involved in logistics and finance. The survey used a Likert scale to measure perceptions of various obstacles. Descriptive statistics were used to rank the identified barriers based on their perceived significance. The results show inconsistent internet connectivity is the most significant barrier to digital payment adoption, with a mean score of 3.90. Other critical barriers included lack of infrastructure, user reluctance, limited customer awareness and training, lack of integration with existing logistics systems, and resistance to change from employees or stakeholders. Data security and high transaction fees were recognized but deemed less dominant than infrastructural and integration issues. The study concludes that successful digital payment implementation requires addressing technological and human factors. Recommendations include investments in reliable internet infrastructure, customer education programs, and seamless logistics and digital payment platform integration. Future research should explore these barriers in specific geographic regions and demographic groups and identify best practices for promoting digital payment acceptance in the logistics industry. The findings provide valuable insights for logistics companies and policymakers aiming to improve digital payment adoption and economic development in Africa.