Ecommerce.co.za

Rise of digital payments: Transforming SA's informal market

by Athy Le Roux: COO at A2pay.
The South African informal market, a cornerstone of the economy, has been undergoing a profound transformation driven by the rapid rise of digitised payments. This shift is not merely about replacing cash; it's fundamentally altering how businesses operate, interact with customers and access new opportunities.

Once dominated by cash transactions, the informal sector is increasingly embracing digital solutions. Factors driving this shift include:
  • Increased smartphone penetration: Widespread smartphone adoption provides convenient access to digital platforms.
  • Growing awareness of digital financial tools: Consumers are becoming more familiar with mobile money, e-wallets and other digital payment methods.
  • Demand for safer, more efficient transactions: Digital payments offer enhanced security and reduced reliance on cash, mitigating risks associated with theft and fraud.
For merchants, the integration of diverse payment options has become paramount. Accepting mobile money, payment wallets, card payments, PayShap, Ozow, Scan to Pay and even Buy-Now-Pay-Later (BNPL) solutions, not only expands their customer base but also improves cash flow management, reduces the risk of theft and enhances customer satisfaction.

The introduction of digital vouchers has enabled the conversion of cash into digital currency, fostering financial inclusion and expanding economic participation.

Furthermore, the rise of digitised payments has paved the way for the burgeoning ecommerce sector within the informal market. Major players like Takealot are expanding their reach into underserved regions by employing personal shoppers and implementing localised delivery models. This expansion provides consumers in the informal market with greater access to goods previously difficult to obtain.

The emergence of hyperlocal ecommerce platforms, tailored specifically to the needs of the informal market, further reinforces this trend, enhancing accessibility and convenience for both merchants and consumers.

While the transition to a more digitised market presents challenges, it also unlocks significant opportunities for growth and development.

Useful resources:
A2Pay
A2Pay's recently launched A2Z is an online wholesale service that empowers merchants to order and pay for goods online, with direct doorstep delivery. This innovative solution addresses logistical challenges, reduces operational costs, and fuels business growth for spaza stores.
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