South Africans Are Embracing Mobile Payments & Ditching Cash

By  |  April 8, 2024

South Africans are favouring mobile payments over traditional physical wallets, with adoption rates matching or even surpassing those of cities in both emerging markets and developed economies.

This revelation comes from the latest SpendTrend24 report, a collaboration between Discovery Bank and Visa. Drawing from data sourced from Discovery Bank’s clientele in South Africa, as well as information gleaned from over 60 million Visa cards globally and more than 3 billion transactions, the report offers a comprehensive insight into shifting spending habits.

The 2024 edition of the report delves deep into the expenditure patterns across South Africa’s major metropolitan areas – Joburg, Cape Town, and Durban. Through this analysis, South African spending behaviour is compared with global counterparts across various markets.

Despite facing a challenging macroeconomic climate, South Africans exhibited resilience in 2023, showcasing slight growth in spending compared to their global peers. Notably, digital wallets, such as Apple Pay, experienced a significant surge, reports Daily Investor witnessing a 9% increase in 2023 compared to the previous year.

According to the 4Sight Digital Banking Behaviour Survey, over 60% of South Africans prefer digital wallets due to their convenience in eliminating the need for a physical wallet and offering seamless payment tracking. Additionally, the inherent security features of digital wallets, including biometrics, encryption, and tokenisation, mitigate risks associated with physical theft or loss.

Interestingly, South Africa’s digital wallet spending and usage growth outpaced that of all global cities with available data. This paradigm shift is further emphasised by a fivefold increase in online spending compared to in-store purchases in 2023.

The surge in online shopping is evident, with 82% of South Africans making online purchases in the past year, as per 4Sight’s survey. However, Euromonitor’s research notes South Africans’ enduring ties to physical shopping experiences, particularly in malls, where they enjoy browsing, even if not making purchases.

A notable aspect of this evolving trend is the burgeoning popularity of online grocery shopping, which witnessed a 10% growth in spending in 2023 compared to a mere 2% increase in in-store grocery spending. This shift is facilitated by the availability of same-day delivery services, providing consumers with flexibility and convenience.

In the words of Discovery Bank CEO Hylton Kallner, digital payments are set to dominate further as consumers increasingly opt for contactless payments through smart devices and online transactions. This transition is primarily driven by the convenience and security offered by digital payment options.

Looking ahead, a balanced growth trajectory is anticipated for both in-store and online purchasing, as retailers pivot towards omnichannel sales strategies to meet evolving consumer expectations for seamless shopping experiences.

Featured Image Credits: SARB

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