Debit cards dominate the payment card market in South Africa both in terms of transaction value and volume. Nearly 80% of all cards in circulation are debit, and their number is predicted to rise quickly. This is primarily on account of improved financial inclusion and awareness, the growing banked population, and increased consumer confidence in card-based payments. Innovative banking models offering debit cards through mobile-only banks and post office branches are also pushing growth.
South Africa has one of the region’s fastest-growing credit card markets, following decades of limited access to credit facilities. Consequently, millions of people - especially among the middle class - have become an available and attractive market for financial institutions. Lower interest rates on credit cards compared to personal loans also make them attractive. As economic conditions have worsened and employment has raised, consumers in South Africa started to use credit cards extensively, primarily to meet temporary credit requirements.
South Africa has a high mobile phone penetration rate, and e-commerce will grow further as consumers become more comfortable shopping on their devices. Contactless payments are, however, still in their infancy in South Africa, and although awareness and ownership are on the rise, usage remains low. Merchants and banks are pushing the technology, with a recent partnership between Shell and Visa allowing contactless payments to be made on the petrol supplier’s forecourts. Major banks such as FNB, Absa Bank, and Standard Bank are also playing their part by offering cards with contactless features
Although e-commerce penetration in South Africa is comparatively low by international standards, the market posted a review-period CAGR of over 20%. Traditional payment instruments, including payment cards and bank transfers, remain the preferred methods of payment for online shoppers in South Africa. Alternative payment solutions such as PayPal and Masterpass are also becoming a lucrative e-commerce payment tool in South Africa, mainly because of the security and comfort they offer.
The report "Payments in South Africa 2017: What Consumers Want", examines the consumer payments market in South Africa, considering payment cards, online payments, P2P payments, and newer payment technologies such as mobile wallets and contactless. The report also examines the main regulatory players overseeing the market.
Moreover, this report provides in-depth analysis for the following:
- Analyzes consumer attitudes to financial services by lifestage.
- Analyzes the major payment card types in terms of both card holding and usage.
- Identifies the major competitors in card issuing and how their position in the market has changed over the last five years.
- Considers consumer attitudes towards P2P tools, mobile payment tools, and contactless cards, and how companies in South Africa are deploying these tools to meet customer needs.
- Explores the online payment market in South Africa by merchant type and payment tool, as well as providing a five-year forecast for the development of the market.
- To improve consumer confidence in electronic payments, in July 2016 PASA launched a standardized specification in association with Visa and Mastercard, in order to facilitate biometric authentication on payment cards.
- To promote the use of contactless payments in the country, in September 2016 FNB announced that all its credit and debit cards will support contactless functionality to allow customers to conduct payments up ZAR200 without PIN verification.
- To complement traditional banking, new banking models are being adopted to increase the banked population and debit card penetration. Commonwealth Bank Australia has introduced its mobile-only bank TymeDigital, the license for which was received from the SARB in September 2017.
- Understand the key facts and figures in the consumer payments market in South Africa.
- Learn what trends drive consumer behavior at the macro level and plan your strategy accordingly.
- Find out what products the major competitors are launching in the market.
- Discover consumer sentiments towards various payment tools in the South African market and use this knowledge to inform product design.
Payments Infrastructure & Regulation