The adoption of e-payment in small countries has remained low, despite the potential of the technology. However, there are still a number of challenges that these small countries face. Here, we look at Security, Reliability and Compliance issues.
Compliance issues
One of the most common problems encountered by merchants who accept credit or debit cards online is compliance. Not complying with regulations and standards may lead to fines or even bad publicity. To avoid this, merchants should choose a company that specializes in payment processing compliance. Payment processing compliance is vital to protect customers and businesses.
A key challenge facing small countries is compliance. Although technology-driven payment instruments are helping the development of e-commerce, implementation in developing countries is fraught with security and privacy issues. One case study is Nigeria, where the push to regulate e-payment systems has been particularly vigorous. In this context, this article argues that law is an essential regulatory mechanism, which can compel companies to comply with industry and technical standards, while also protecting the public’s interests.
Consumer privacy
Consumers are hesitant to share personal data, particularly for less important transactions, such as making a payment online. As a result, they will vote with their feet if a service provider fails to protect their data. While consumer privacy awareness is rising globally, many consumers remain unaware of the best ways to protect themselves. Just one-third of internet users in a small country regularly change their passwords and use an ad-blocking tool.
Even though GDPR is the strictest data-privacy regulation in the world, many companies still do not fully comply with the new regulation. For example, a company in Singapore may not be subject to the same strict requirements as a company in the United States. That is why they should work with a data-protection officer, a newly-defined corporate position. This role has many benefits, including increased privacy protection.

Reliability
Reliability of e-payment systems is important for developing economies. In countries with advanced payment systems, physical infrastructure is already in place to support digital payments. In smaller countries, however, the lack of electricity and poor transport networks limit the expansion of digital financial services. Reliable digital payment systems are more cost-efficient in the long run, but significant upfront investments are necessary. In addition, developing economies tend to have poor network coverage, which can result in transaction failures and lower confidence in online financial services.
In order to determine how reliable an e-payment service is, researchers must consider the factors that influence users’ trust and security. They found that perceived security and ease of use are significant determinants of customer satisfaction. Moreover, researchers must consider the age group of consumers when evaluating the perceived security and trust of e-payment systems. For example, people aged 18 to 25 are often eager to adopt the latest technology.
Security
The Covid-19 pandemic has pushed many governments to embrace digital payment platforms for the distribution of funds to vulnerable groups and paying essential workers. Rwandan officials have eased regulatory requirements, waived digital transfer fees, and increased the maximum online transaction limit, all in an effort to promote access to digital payment services. However, the lack of infrastructure and a culture of distrust for digital payment systems have led to a growing demand for a solution.
Payments involving credit cards have many risks. For one thing, they are highly vulnerable to fraud. Cards are stolen from owners and misused by merchants. In addition, some fraud occurs as merchants fail to deliver goods, and the borrowers’ accounts are defrauded. Credit card issuers stand to lose money if the cards are fraudulently used. As a result, they are becoming more selective about the merchants they approve.
Cost
A key question to ask is how much does it cost to set up a digital payment system in a small country? Developing countries may not have the financial and physical infrastructure to support the digital payment system that advanced countries do, and they may have rudimentary banking systems that only serve urban areas. Developing countries also face challenges related to the availability of electricity and transport networks. Although digital payments are more convenient and efficient in the long run, setting up a physical payment infrastructure can be expensive.
The problem is compounded by the high costs of handling cash. In the UK alone, for example, a large bank can charge up to PS1 billion per year for processing cash. This cost disproportionately affects low-income demographics. This has led many developing countries to make the switch to electronic payments as a way to reduce the cost of cash. And while establishing an electronic payment system will reduce the cost of processing cash, it will also increase the speed of payments.