Covid-19 comes as a blessing to electronic trading globally

The coronavirus continues to baffle scientists especially with its shelf life. Recent research has shown that it can live for hours to days on surfaces such as metals, plastics, countertops and doorknobs.

How long it survives depends on the material the surface is made from. When it comes to paper surfaces, the length of time varies. Some strains of the virus can live for only a few minutes on paper, while others live for up to five days. Which is why physical paper money has become a point of concern for health authorities as it could become a super-spreader.

In March 2020, the Central Bank of Kenya announced that all currencies evacuated by commercial banks to its vault will be quarantined for one week before being released back into the system. But even more important, there has been calls for the adoption of cashless transactions in areas of commerce where cash is predominant-such as public transport.

The momentum appears to be picking up. Latest statistics from the CBK show that the ratio of currency outside banks to total money supply averaged at six percent in the first five months of the year upto May, compared to seven percent in 2019 (and eight percent in 2018). The ratio is not a precise measure of cashlessness but can give an idea on the extent.

Nonetheless, from it, we get an idea that the population had began to transact cashless. But that’s not enough. Courtesy of the internet, commerce has also began going contactless by way of electronic means (e-commerce), albeit gradual. Payments firm Visa's Covid-19 tracker survey released in June showed that as consumers and merchants focused on safety and hygiene, contactless payments increased with enabled merchants seeing an 88% growth in contactless usage. A joint 2016 National ICT Survey between the Communications Authority and the Kenya National Bureau of Statistics (KNBS) National ICT Survey established that 39 percent of private enterprises are engaged in e-commerce.

However, the pandemic seems to have accelerated contactless commerce especially by the large entreprises. For instance, in the wake of the lockdown measures imposed by health authorities, a number of big retailers embraced online shopping (and delivery). When you think about the internet, which has this unlimited capacity as a free platform, then the opportunity is colossal (especially for small businesses).

Statistics from the Communications Authority put internet penetration in Kenya at 81 percent, which is one of the highest in Africa. About 98 percent of internet subscribers access it via mobile devices, primarily due to (i) declining cost of mobile data; and (ii) increased penetration of smartphones.

But beyond large entreprises, there is now a lot of potential in the small and medium entreprises (SME) scene. At a time when business survival depends on keeping costs low, e-commerce can enable SMEs lower delivery costs and stay competitive, and can also help them build scale.

Availability of innovative mobile payments has made sure even smaller convenient retailers can drive contactless shopping.

Products such as Visa’s contactless payments technology can now enable shoppers to tap on a terminal to make their payments. In fact, the pandemic has also busted the myth that e-commerce and card payments are the preserve of the affluent and educated.