With heightened awareness around hygiene and safety, more people are turning to digital and contactless payment solutions to avoid the handling and exchange of physical cash.
Customers are opting to make payments via online banking and mobile app banking or by using the tap-to-pay function when paying for items in the stores, says Andrew van der Hoven, head of digital banking at Standard Bank.
Even before the coronavirus reached South Africa, digital and contactless payments were on the rise and have shown significant growth over the past 12 months. Standard Bank has also observed growth in contactless spending on both credit and cheque cards.
Contactless payments now make up around 15% of overall credit card spend, up from 3% last year, while contactless payments on cheque cards account for around 12% of overall spend, up from 5% last year.
“The rate of adoption is encouraging and demonstrates the evolving consumer need for digital solutions to transact. Enabling fast, frictionless and safe payments is key, especially now where there is reluctance to deal with cash,” Van der Hoven says.
The bank has also seen an increase in the use of its virtual cards, which can be accessed and set up via the mobile app. Clients can select from a range of digital cards to make purchases online with popular e-tailers without having to expose their credit or debit card details.
The cards allow consumers to top up for online purchases or physical cash withdrawal and so eliminate over-spending. “Transactions made using virtual cards amounted to around R2 million in 2019 and we will continue to see the growth in the numbers due to the new normal under Covid-19.”
South Africa, like most African countries, remains a cash-based society but the virus pandemic is helping to accelerate the move to a more cash-free environment,” he says.
“We know that Covid-19 will be with us for the foreseeable future and risks around hygiene will not go away any time soon. This means that we could possibly see a more sustainable and permanent shift to contactless solutions going forward.”
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