Digital payment trends in South Africa

by Anupam Pahuja: PayPal VP, India, South East Asia, Middle East and Africa.
Digital payments have shown a massive growth trajectory over the last 18 months on account of the pandemic. We have seen accelerated adoption of technology as retail moved from physical to digital. In 2020 alone, an additional $900 billion was spent on retail ecommerce across the globe. Locally, consumers seamlessly adopted digital across all walks of their lives - entertainment, ordering food, shopping, pursuing hobbies, health and wellness, to name a few.

We’ve seen countries around the world like China, Japan, the United States, UK and Sweden issuing digibank licenses, seeing the potential they have in leading innovation and enabling better outcomes for customers and merchants, especially small businesses.

With digibanks, there are fewer overhead expenses, and they offer incentives like higher interest rates for deposits and lower fees for financial products. The use of AI and machine learning enables digibanks to deliver services and products with speed, efficiency and personalisation over traditional banks. Digibanks will play a pivotal role in supporting SMEs who traditionally have faced issues getting access to financing options from traditional banks. Their flexible offerings can be tailored to the niche requirements of SMEs and freelancers.

This trend is certainly growing in South Africa with three digibanks already in operation. Most of the traditional banks have also revamped their digital solutions to offer a better service and provide choice to consumers.

As digital adoption increases we are also seeing an increase in the amount of fraud, as bad actors try to manipulate loop holes. Fraudsters are especially active in retail, classifieds, creating fake courier services, booking apartments or renting a household space, which they either do not own or do not exist. We urge merchants to take a technological approach to protection, using the modern capabilities of automated protection and analytics platforms. The cost of fraud is much higher than the cost of preventing it.
Share on Twitter Share on LinkedIn Share on Facebook
Share via Email
©2022 SURREAL. All rights reserved.
Follow us on Twitter Follow us on LinkedIn Join us on Facebook