Spotlight: The Democratic Republic of the Congo on the path to digitizing payments

After the first peaceful transfer of power in the Democratic Republic of the Congo (DRC) in 2019, the country has continued to make strides in its growth.

During 2021, according to the International Monetary Fund, growth shot up from 1.7 percent in 2020 to an estimated 6.2 percent - well above the average 4.5 percent rate in Sub-Saharan Africa. To date, economic growth in the DRC continues to be above the average reported growth in Sub-Saharan Africa. Meanwhile, the exchange rate has stabilised as the Central Bank ceased providing financing to the government¹.

However, there are still significant challenges when it comes to managing the dollarized economy - not least, the fact that fewer than a quarter of DRC businesses accept digital payments, and 90 percent of payments in the country are made with cash. Only five percent of the population have a bank account, and even fewer have a means of digital payment.

As the utilisation of digital payments across the country increases, this will offer a way to deepen the Government’s understanding of what is driving the national economy and support businesses and consumers accordingly. Visa estimates 1.1 million people, out of the 100 million population, to have a Visa card this year and approximately eight million people to turn to cards over the next five years – which are likely to be accepted at 200,000 merchant locations, as Visa supports the increasing acceptance of digital payments across the country.

There are, though, some significant barriers to adoption. Fewer than one in five people in the DRC have an internet connection and fewer than half have a mobile phone, according to Statista². Meanwhile, even when digital payments systems are available, these tend to be targeted at specific sectors rather than the average consumer or small business.

Improving confidence

But if people are to feel confident using digital payments, financial education and inclusion are key. And with many DRC residents uncertain of how to use a payment card, or of its benefits, most find it simpler to just carry cash.

To this end, Visa is now working with the Vodacom foundation, in partnership with the Ministry overseeing people living with disability, which aims to reduce poverty and improve living standards in the DRC by providing microloans for business. This one-year social impact project aims to help 500 disabled women, supporting them to become entrepreneurs through training, with a focus on education, digitalisation, banking and digital acceptance through QR codes.

Meanwhile, through a three-year partnership with FPM, Visa will grant $1mn to a financial education program targeted at cooperatives, mobile money operators and learning institutions⁴.

The DRC Financial Inclusion Roadmap highlights efficient payment systems as critical not only to financial inclusion, but also to socioeconomic growth. This view is borne out by research by consultancy BCG, which has found that a move to a cashless model adds about three percentage points to the annual GDP of emerging economies, thanks to faster value transfers and increased transparency, making it easier to offer and obtain financing⁵.

"For the DRC to continue its impressive recent growth, the government will need greater insight into transaction patterns and consumers will need quick, convenient payment methods to help keep the economy moving," says Aida Diarra, Senior Vice President and Head of Sub-Saharan Africa at Visa.

"Visa will continue to work with local banks, the government and other partners to help boost the economy, increase the adoption of digital payments and improve financial inclusion. Just watch this space."