Online Payments Have Begun To Soar In South Africa After COVID-19 Lockdown
As South Africa begins to adjust to the COVID-19-enforced lockdown, it seems consumer behaviour is one of the things that is already starting to change. For starters, online payment is beginning to spike in South Africa.
South Africa’s COVID-19 statistics currently reads: 1170 infections, 31 recoveries and 1 death, and last Monday, President Cyril Ramaphosa announced a 3-week lockdown starting Thursday, March 26, to curb the spread.
Before the lockdown was even touted as a possibility, a number of banks in South Africa had moved to promote virtual banking to avoid the spread of COVID-19. This is not unconnected to rhetoric around cash being a possible vector of the virus.
FNB CEO, Lee-Anne van Zyl, said over the past few days “Our customers can use our app to download bank statements and manage their debit or credit cards without going into a branch.”
On the other hand, Capitec recently said people should avoid cash and ATMs as they are touched and handled by a high number of people daily.
Well, it seems South Africans have begun to heed the advice and as a direct result, online payments are beginning to soar.
Online financial service, QuotesAdvisor, told us that it has analysed its website transactions and the results indicate a change in customers’ behavior as a result of the outbreak.
“In the last days, we registered a slight increase in the number of online payments, and we expect this trend to continue, as more people adjust their everyday habits to reduce the risk of virus transmission,” said Christian Rennella, the CEO of QuotesAdvisor.
“Although a 30 percent drop in transactions is expected, online payments will increase by at least 12 percent in relative terms,” he added.
Online payments are have become popular almost everywhere in the world, and South Africa is no exception.
However, the current situation reflects that, for those in low-income households, for the elderly, and for people in rural regions, cash is the main method of payment for most South Africans.
This is justified in part because only 37 percent of the country’s 55 million citizens have access to smartphones according to an Ipsos report.
According to a study by PYMNTS cash continues to be the trusted and most widely-used payment method in the country, with over half of consumer transactions still being paid in cash.
In addition, a Twitter survey carried out by Capitec discovered that 35 percent of South Africans could see themselves conducting purely digital transactions, while another 10 percent said “maybe.”
According to the Digital 2020 report by We Are Social and Hootsuite, South Africa has 36.54 million internet users of a total population of 58.93 million people. In other words, a penetration rate is 62 percent of the total population.
According to that report, 54 percent of South African internet users use mobile banking or other digital financial services every month. This is far higher than the global average of 35 percent of internet users using online financial services.
Also, in South Africa, a multi-million dollar battle for online banking is brewing with the likes of Discovery Bank, Bank Zero, and TymeBank among newly-launched digital banks that are jostling for pole position.
On the other hand, regarding online payment services, the situation is different. Platforms like PayPal, Apple Pay or Samsung Pay do not have the people’s confidence, so to speak.
In any case, the use of online financial services in South Africa has started to pick up to a higher-than-usual level and this uptick is expected to continue for the entirety of the lockdown.
Featured Image Courtesy: BusinessWorld
