South Africa’s consumer appetite for digital payments takes off, Mastercard study finds

Mastercard has come out with a new study that highlights South Africa’s consumer appetite for digital payments and the rising adoption of new payment technologies.

As the world went into pandemic lockdown in 2020, consumers shifted their spending habits to embrace contactless tap-and-go payments and online shopping. As stores closed and social distancing took hold, retailers worldwide moved their businesses online, embraced ecommerce, and explored the potential of new ways to pay. More than a year later, the Mastercard New Payments Index shows 95% of South African consumers will consider using at least one emerging payment method, such as cryptocurrency, biometrics, contactless, or QR code in the next year. Over two-thirds of respondents (66%) agree they have tried a new payment method they would not have tried under normal circumstances, but the pandemic has galvanised people to try flexible new payment options to get what they want, when they want it.

With this interest and consumer demand also comes a greater expectation for businesses to provide multiple ways to shop and pay. In fact, more than half (57%) of South African consumers say they would avoid businesses that do not accept electronic payments of any kind. Additionally, just over two thirds (77%) of South African respondents say that digital payment methods help them save money.

A year into COVID-19, contactless is showing its staying power and dynamism – in the first quarter of 2021 alone, Mastercard saw 1 billion more contactless transactions globally as compared to the same period of 2020. All signs point to a continued growth path for contactless, with nearly 7 in 10 consumers globally anticipating using a contactless card this year. Looking to the future, digital currencies, mobile wallets, wearables, biometrics, contactless, and QR codes are trending as emerging payments technologies as people’s comfort with them increases. In fact, 86% of South African consumers have more ways to pay compared to this time in 2020. The exploding interest in new payment technologies may encourage businesses to expand their options at checkout. The Mastercard New Payment Index found:

• cryptocurrency gains ground: as interest in digital currencies continues to accelerate, 4 in 10 people (41%) in South Africa say they plan to use cryptocurrency in the next year, with more than half (60%) noting they are more open to using it than they were a year ago;
• biometric payments are more trustworthy: perceptions of safety and convenience have been front and centre for people over the past year, and 38% of South African consumers say they plan to use biometric verification methods like fingerprint authorisation in the next year with 56% feeling safer using biometrics to verify a purchase than entering a pin;
• QR codes are cleaner and more convenient: consumer desire for clean and convenient ways to interact with merchants will remain post-pandemic, with 46% of South Africans expecting to use more payment technologies like QR codes in the next year;
• contactless cards and digital wallets become more popular: driven by hygiene concerns, consumers are opting for contactless payments at checkout, and 63% of South African consumers said they used their contactless card, while 52% said they tapped their smartphone mobile or digital wallet more than other payment methods in the last year. This trend is set to continue with 60% of South African respondents saying they are likely to tap a smartphone to pay in the coming year.

Source:thepaypers.com