Demand for digital payments in South Africa continues to grow – Mastercard New Payments Index 2022

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According to Mastercard’s New Payment Index 2022, adoption of a wide range of digital payment methods in South Africa is accelerating.

In addition to knowing solutions such as cryptocurrency, digital cards, biometric payments, Buy Now Pay Later (BNPL) and open banking, consumers in South Africa are increasingly and actively using these solutions for various financial transactions in their daily lives.

Mastercard’s New Payments Index 2022 shows that 95% of people in South Africa have used at least one emerging digital payment method in the past year.

The survey found that while in-person purchases remain common, consumers are making purchases in increasingly diverse ways, such as with loyalty points or store credit cards, and through a range of digital purchasing activities.

In the past six months, 67% of consumers have made a purchase on an online marketplace, 66% have purchased something through a mobile app, and 49% have purchased a service through an online subscription.

Use of digital payments is increasing

While traditional payment methods such as cash and swipe or credit card entry are still popular, the use of emerging digital payments is gaining traction.

Three quarters of users have increased their use of at least one emerging digital payment method in the past year.

An overwhelming 97% said they were likely to use a digital payment method in the next 12 months, with account-to-account payments (86%), digital transfer apps (81%), instant payment services (80%) and digital credit or debit cards (78). %) on the top of the list.

The Index confirmed that security is a top priority when deciding which payment methods to use in South Africa and globally.

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Interestingly, traditional payment methods are still considered more secure than emerging digital methods, with 79% of South African consumers saying swipe or insert a debit or credit card is the safest way to pay.

In addition to security, South Africans cited ease of use (51%) and the rewards offered (44%) as distinguishing factors when choosing which payment method to use.

“Consumers in South Africa have consistently shown a willingness to adopt innovative new technologies – and payments are no exception.”

“At Mastercard, we are committed to understanding the unique needs and preferences of the people in the markets we serve, and working with the public and private sectors to develop market-relevant solutions as we build an inclusive and connected digital future that works for everyone,” says Gabriel Swanepoel, Country Manager at Mastercard, Southern Africa.

The Mastercard new Payments Index 2022 further shows:

High familiarity with Buy Now Pay Later (BNPL) installments as a budgeting tool

There is a high awareness of BNPL deadlines as a budgeting tool, with 91% of South African consumers saying they are familiar with the concept and 27% saying they have used it in the past year.

While consumers want the flexibility and convenience of BNPL, they want the security that comes with a trusted provider such as a bank or payment network.

Consumers find BNPL useful for large ticket purchases and emergency use, as well as increased purchasing power. They also find it useful for unique use cases, including as a budgeting and financial planning tool.

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Eligibility for more direct Account-to-Account (A2A) payments

The majority of consumers are looking for more flexibility to optimize bill payments, prioritizing control, flexibility, convenience and integrated payment technologies.

Most consumers are open to instant account-to-account payment options, linking their account to a merchant site or utility company for future purchases.

Consumers rely on digital channels for bill payment because it is more convenient and optimizes financial management.

Sixty percent of South African consumers say it helps them budget and manage their money better, while 51% say they use digital tools to set up recurring payments.

Overall, 84% of consumers agree that they want to make purchases or pay bills directly from their bank account without entering card details.

Consumers are turning to fintech and indirect open banking to fulfill everyday financial needs

Consumers rely on digital tools to perform everyday financial tasks, with 71% of South Africans using fintech for five or more tasks, with banking and paying bills emerging as top use cases.

Most consumers are familiar with open banking – the ability to share your banking information with other financial services providers – and use it to pay their bills, conduct their banking, secure or refinance loans, and make BNPL payments.

South African consumers cite faster transactions (60%) and ease of tracking transactions between accounts (59%) as the biggest benefits of open banking and account linking.

Eight in ten consumers agree that they feel safe using apps to send money to people or businesses from their phone, and nearly half agree that they feel comfortable sharing financial information. information with apps to access payment tools that help them manage their money.

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Biometrics provide convenience and security at checkout, but data access concerns remain

Consumers recognize the increased convenience and security that: biometrics 75% agree that it is easier to make payments with biometrics than with a card or a device.

The potential for security optimization is also clear to consumers, with about three-quarters agreeing that biometric technologies for identity and payments are more secure than a PIN, password or other form of identification and more secure than two-factor authentication via SMS or email.

While consumers are concerned about which entities have access to their biometric data, they are still open to using it given the time it saves as the majority of consumers have used it or plan to use it. creating biometric data.

As consumers shop, bank and transact digitally more than ever before, Mastercard continues to strengthen its digital payment capabilities in South Africa and the wider EEMEA region.

The trusted technology solutions are being leveraged for new use cases, brought to market through various partnerships with fintechs, governments, financial institutions, digital giants and telecom operators.

By leveraging multi-rail capabilities to create competitive localized solutions, Mastercard is accelerating the transfer of value in new ways, across multiple rails, promoting a bright future for inclusive commerce.

Click here for more information about Mastercard’s BNPL

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