Cape Town – South African consumers will only switch to digital wallets if the technology proves to deliver significant benefits over cash, says an industry player.
Discounts, coupons and value-added pricing would convince 54% of consumers to switch from cash to digital wallets, research from Accenture indicates.
Mobile wallets have to be as convenient, reliable and secure as debit cards in order for consumers to trust them, says a local payment provider.
“The days of battling to access and use a payment application on a mobile device are over. Now, once a person is registered, they can use the digital wallet in the same way as they would their physical one, although the digital version is a lot quicker and easier,” said Mel Gischen, head of consumer business at PayU.
MasterCard data in 2015 showed that 65% of South African transactions are cash, reflecting the lack of debit card penetration in SA and an unbanked population.
In SA, credit card penetration has been pegged at about 17%, challenging online shopping merchants to find alternative payment methods.
“We have agreements with more than 100 leading retail stores that include SAA, The Foschini Group Pick n Pay, DStv and more. We have also made sure that the stores we work with are those that have among the biggest online consumer footprints in the country. All this in a bid to grow the accessibility, and by default, the market,” Gischen said about the company’s digital wallet.
According to the wiGroup, businesses should focus on customer relationships as people move to mobile technologies.
“Proactive retailers will take a good look at the new consumer, and work to close the gap between consumer expectations and the ability of businesses to meet them. Developing trust is key especially to grow brand loyalty,” the company said.
The payment platform develops coupons that consumers redeem via smartphones.
“Here in South Africa, Shoprite Group’s popular Eezicoupons offers instant shopping discounts to customers via its mobile app, and now are also available to FNB Customers through the FNB banking app,” said wiGroup.
PayU said that it has built its digital wallet to be robust in the face of crime in the country.
“If your cards are lost or stolen, you can load cash into your digital wallet using EFT or a physical deposit at the bank or ATM, and help out a friend in need by transferring funds from one digital wallet to another,” said Gischen.
*Fin24 is a division of Media24, a subsidiary of Naspers, PayU is part of Naspers
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