Global payment platforms turn mobile phones into SME cash registers amid rising fraud risks

Across Kenya’s bustling markets and roadside shops, the mobile phone is fast becoming the new cash register, transforming how small businesses handle payments.

In contrast with complicated hardware within banks and other financial institutions, the phone enables instant transactions, reduces barriers to financial inclusion, and becomes a catalyst for growth for small and medium enterprises that need to expand their customer base.

According to the World Bank Group’s Global Findex 2025 report, 1.3 billion adults lack access to financial services, and mobile phones could help close this gap. “About 900 million adults without financial accounts have a mobile phone, including 530 million with smartphones,” says the report.

In countries such as Kenya, the mobile-first approach has made Africa the world’s leader in mobile money, accounting for nearly three-quarters of global transaction volume.

Global fintechs have jumped on the mobile payment bandwagon by introducing products that are designed to expand how smartphones accept and send digital payments.

These include system updates intended to make it easier for small businesses in emerging markets such as street vendors and the growing number of online merchants to manage payments using reliable tools.

“We see a future where a single smartphone is all a seller needs to accept any way customers want to pay, gain powerful insights and confidently run their business, so they can spend less time on payment friction and more time creating the experiences that keep customers coming back,” said Shahebaz Khan, senior vice president and head of commercial and money movement solutions for Central and Eastern Europe, Middle East and Africa at Visa.

The global digital payments company last week announced the introduction of new tools, Visa Accept and Visa Direct, that will enhance mobile phone capabilities to both send and receive digital payments and hopes to turn the smartphone into a hub for SME (small and medium) commerce that combines acceptance, payouts, and customer interactions in one device.

While most common mobile money transactions involving small businesses such as mama mboga are domestic in nature, the introduction of such new tools by Visa will enhance cross-border trade as they turn a smartphone into a card terminal, allowing the micro-sellers to accept card payments through their Visa debit or prepaid account, with no extra hardware needed. The funds can reach the sellers’ account in near real-time.

In Kenya, Co-operative and Access Bank are set to launch the new Visa products in the coming weeks.

The World Bank’s Global Findex 2025 report is the first one to include data on mobile phone use across the world. Using data from Global Findex Digital Connectivity Tracker 2025, it says 86 per cent of adults globally own a mobile phone, with 68 per cent of adults owning a smartphone.

According to the global bank, mobile phone technology played a key role in the surge in financial savings, with 10 per cent of adults in developing economies using mobile-based cash accounts, a five-percentage point increase from 2021.  In Sub-Saharan Africa, the bank says such formal savings increased by 12 percentage points.

However, the bank says such high penetration of mobile phone use in financial transactions comes with related risks, including poor security measures by the owners. “Of the four billion adults in low and middle-income economies who own a mobile phone, only around half use a password to protect their phone,” says the World Bank report.

Charles Lobo, Visa’s vice president and regional risk officer for central and eastern Europe, Middle East and Africa.

A survey released in early June shows only 12 per cent of Kenyans shopping online believe consumers should be primarily responsible for protection against fraud. Separately, 67 per cent say alerts when something looks suspicious would help them feel more secure paying online.

The annual Stay Secure study in Kenya conducted by Wakefield Research assessed consumer awareness and behaviours around digital commerce and fraud, highlighting how AI‑enabled shopping and social commerce are changing consumer behaviour even as expectations around trust and protection remain in place.

As commerce expands across new channels fuelled by mobile phone penetration, fraud risks continue to follow Kenyan consumers online, with 37 per cent having experienced a financial scam in the past 12 months.

“Visa’s Stay Secure study shows that while online shopping and social commerce continue to grow, scams and fraud are evolving too. Consumers see fraud protection as a shared responsibility, but they expect financial institutions, governments, and payment providers to take the lead, underscoring the importance of secure-by-design payment systems,” said Irene Auma, Visa’s head of risk, sub-Saharan Africa.

As the use of mobile phones as tools for business transactions increases, the majority of consumers in sub-Saharan Africa are the most likely to admit being victims of fraud, with the largest number (71 per cent) in Kenya.

“This suggests that Kenyans have more experience than some of their neighbours with schemes such as smishing, which involves fraudulent text messages targeting data extraction, in what appears to be an especially active market for fraudsters,” says the study.

Players in the digital payments industry say fraud and risk have evolved and are no longer confined to the ‘old school’ calls made by fraudsters targeting random individuals but create customised attacks based on a customer’s shopping behaviour.

“It is a big shift showing sophistication at scale,” says Charles Lobo, Visa’s vice president and regional risk officer for central and eastern Europe, Middle East and Africa. “The era of fraudsters sitting in a garage and making threatening calls is coming to an end. Today, financial crimes are technology-driven. Such technology can make those calls and send messages after collecting data through cyber attacks.”

Visa has spent $13 billion  (Sh1.7 trillion) in AI and data technology to combat this, especially through the use of AI models trained to flag abnormal transactions. Such models, according to Lobo, are continuously learning to flag any unusual behaviour and use the information to alert banks in every single transaction driven by Visa.

“We assign a risk score to every transaction, using close to 500 data elements in the blink of an eye, compute the score and send it to the bank. The bank makes the final decision whether to allow or stop the transaction based on the score when you are at the merchant store. We process 22 billion data signals through Generative AI per day. These are very large amounts of data with minimal amount to react,” says Lobo.

As mobile phones evolve into the new cash registers for SMEs, they are also becoming prime targets for increasingly sophisticated fraudsters who are using the same accessibility that fuels financial inclusion to expose millions to cyber risks. In an era where a single smartphone can run an entire enterprise, strong safeguards against cybersecurity will create a strong foundation upon which consumer trust is built.