How SA's moving towards a cashless economy

2018-10-30 11:22
Samsung pay is a form of mobile payment.

Samsung pay is a form of mobile payment.

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“We’re so sorry, but we don’t accept cash here.” 

Fast forward a few years and this might be a common thing to hear from South African merchants and vendors who would much rather prefer to scan your QR code than count out your change. But for other emerging markets, like China, a cashless economy is already a reality.  

From 2013 to 2016, the number of transactions made through non-banking mobile apps in China increased from 3.7 billion to more than 97 billion. This resulted in an annual growth rate of over 195% in mobile transactions, according to a study by Ipsos. But what has caused China to leapfrog developed countries into embracing mobile payments?  

Among the public’s willingness to try out a new platform, a lack of red tape and a less developed financial system have apparently made things a lot easier for China, says CNBC. This might explain why India is also winning with mobile payments. The Economic Times reports that in just four months of Google launching their own payments service, Google Tez, the US firm is processing the same number of digital transactions as one of India's top private banks Axis.  

There are signs that South Africa’s transition to a cashless environment could also happen very quickly by the look of trends in fellow BRICS countries. Locally, we have seen the rise of QR code app-based payment services such as Zapper and SnapScan, which has over 50 000 merchants across South Africa. The most recent development on the mobile payment front in South Africa was the launch of Samsung Pay in August. 

Samsung’s core motivation behind developing and implementing Samsung Pay was to give South Africans a smart way of banking at their fingertips, with the security to give them the peace of mind to use it. Geraldine Mitchley, Head of Digital Solutions for VISA in sub Saharan Africa, says Samsung Pay is a life changing payment solution.  

“Considering the number of smartphone users in South Africa, it is expected to reach over 25 million by 2022, we are seeing that the phone is the one item people will always have with them and VISA supports payment solutions that fit people’s changing lifestyle,” she previously told Forbes Africa. 

How does it work?  

It’s as easy as swiping up, authenticating and paying with your Samsung Galaxy smartphone. 

But in finer detail, the Payments Association of South Africa (PASA) has certain requirements for different cardholder verification methods. These vary depending on whether a PIN, a contactless tap-and-go payment, or a swipe with signature is used. “The big question for us (for Samsung Pay) was whether there would be any changes to the existing rules we have in place for card payments,” PASA CEO Walter Volker said. 

Luckily, Samsung Pay supports the same contactless technology banks are rolling out in their cards and can mimic the swipe of a magnetic stripe on the back of a card when tap-and-go is not available. “We accept that the biometrics are secure, but we had to check,” said Volker. Samsung Pay gives users full control of their digital payment by ensuring all transactions are secure and authenticated by the user through iris or fingerprint scanning. Currently, Samsung Pay is available in South Africa on the latest premium Galaxy smartphones for Absa and Standard Bank clients. 

This post is sponsored by Samsung produced by Brandstudio24 for News24. 


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