From coins to clicks: What I have learned from small merchants in Mozambique

Whenever I think about digital payments in Mozambique, I remember a woman I met on a dusty roadside in Mocuba, in central Mozambique. She had a toddler on her hip, a phone in her hand, and a smile for every customer who stopped by her little stall. She sold biscuits, soft drinks, and airtime. What really surprised me about her? The fact that she accepted digital payments.

“It’s good to keep the money in the accounts,” she told me. “Even if you lose the phone, you can recover the card, and the money is still saved.”

That simple comment stuck with me. It showed that local businesses are quietly changing in Mozambique, from a world where cash is king to one where digital money is opening new doors. Digital accounts and payments aren’t just about convenience; they help people save safely, build a financial history, and maybe even get access to credit one day.

As the government rolls out digital social protection payments, I wonder: are small merchants ready for this change? If not, what’s holding them back? It matters because people need to be able to spend their money easily, right in their own communities.

When social benefits land in a digital account, it’s not just cash to withdraw: it’s money for everyday life. That means safer savings, easier bill payments, and more local businesses. Over time, using digital money helps everyone—women and men—become more financially secure.

The lesson is clear. Make digital payments simple, useful, and easy to move between banks and e-wallets. That way, everyone can benefit, no matter where they live or how they earn a living.

Why Small Merchants Matter

Small merchants are the heartbeat of Mozambique’s local economy. When someone gets a payment in their e-wallet, the money is only useful if they can spend it digitally—ideally, right in their neighborhood. That’s where small merchants come in. Sure, cash withdrawals are always an option, but the real goal is for people to use digital money for more than just receiving payments.

I looked at a recent World Bank study in Mozambique. The team who conducted it talked to over 2,000 merchants across five provinces, using surveys and interviews. What did they find? A mix of hope and hesitation, and a clear way forward.

Here’s the catch: 22% of the merchants surveyed in this study still don’t accept digital payments. Many use personal e-wallets, but not business ones. Why? Because personal accounts are easy to set up while business accounts seem complicated or expensive.

The study grouped merchants into three types:

• Non-users: Often rural, often women, and usually informal. For them, cash feels safer and more familiar. As one man told me: “Cash is more useful for us. With the cash we make on a daily basis, we can go to the store and buy food and other goods we need.”
• Light users: Merchants who’ve started using digital payments, usually with personal accounts. They’re testing the waters, often because a customer or supplier nudged them.
• Heavy users: Mostly younger, urban, and more formal. They use digital tools to track their finances, get credit, and serve tech-savvy customers.

No matter the group, everyone uses what works best for them and their customers. For many, cash is still king, even among those who offer digital options.

What’s Holding Small Merchants Back?

Many people in Mozambique still prefer cash. It feels safe, it’s accepted everywhere, and it’s easy to understand. Some merchants worry about transaction fees, unreliable internet, or just don’t see enough customers wanting to pay digitally. Others fear more paperwork or taxes.

According to the Global Findex 2025, about two in five adults in low- and middle-income economies have made at least one digital merchant payment in the past year. In Sub-Saharan Africa, that proportion falls to about 20%. While digital payments are growing fast, cash is still the go-to for daily life.

As one rural merchant put it: “The money I make in a day is not enough for saving or to open an account, because I use it to refill the stall stock.” For many, every metical counts, and they need quick access to their earnings.

There’s also a trust issue. Some merchants have heard stories of scams or lost transfers. And many don’t know that government payments are already being sent digitally. If they don’t see a reason to accept digital payments, digital money won’t get used.

Unless people trust the system, know the costs, and see where they can spend, they’ll stick with what works for daily needs.

What Makes the Difference?

Merchants don’t go digital alone: they respond to what customers and suppliers want.

Customer demand is a big motivator. As one woman told me: “If the client wants M-Pesa, we use M-Pesa. I don’t want to lose the sale.” Suppliers matter too. When wholesalers or non-governmental organizations require digital payments, merchants adapt.

And mobile phones are helping bridge the gap. Many merchants are already using their phones to buy airtime or pay for electricity. This makes digital payments less scary and easier to try.

Then there’s INAS—the government agency for safety nets. INAS uses e-wallets, prepaid cards, smartcards, and cash with electronic verification. They’re working to make payments safer and more flexible. The goal is for people to use their accounts for more purposes than just cashing out—e.g., paying bills or shopping locally. For this to work, however, digital payments need to be accepted everywhere, and money must move easily between banks and e-wallets.

In Mozambique, raising awareness about digital payments and their benefits could be a game changer for small merchants and their clients by promoting safer transactions and savings. 

So, What Can We Do?

Let’s start with what’s already working. Most merchants have phones and personal e-wallets. We can build from there, using simple tools and clear instructions.

• Non-users need basic awareness and trust building—for instance via national campaigns and hands-on support.
• Light users need a nudge—maybe in the shape of lower fees (like in Brazil, where instant payments are free of charge for people) or bonuses for digital transactions.
• Heavy users are our digital champions—they can help teach others and share their experiences.

Interoperability is key. Digital payments only work when money flows easily across accounts and wallets without generating punishing fees. We need to make it effortless for people to use their accounts for more purposes than just withdrawing cash—e.g., paying for utilities, transport, or shopping at local stores. And we need to implement clear, practical communication about how and where people can use this digital money tomorrow.

Finally, we need to make digital government payments visible. While privacy is a key benefit of digital payments, especially for women, merchants need to know that their customers have digital money and reasons to spend it. Promoting financial literacy, clear fee structures, and linking benefits to savings or other financial products can help build trust and encourage digital use.

From Transaction to Transformation

For that woman in Mocuba, digital payments mean more than convenience: they mean security, savings, and maybe even growth.

Making sure people can choose their providers and move money easily is essential for a truly transformative digital payment system.

For social protection practitioners and policymakers, this isn’t just about finance; it’s about people. Empowering small merchants isn’t a side effect of digitizing social payments. It’s a strategy to build a resilient, inclusive economy where every metical counts and every transaction can help someone thrive.