South Africans are among the most banked on the continent, ranking second place in a Brookings study that included 21 developing economies across Asia, Africa and South America for both digital and financial inclusion.
Around 86% of adults have access to banking in one form or another and, according to On Device Research, mobile penetration is at 133%. So why is it that South Africans are so reluctant to delve into digital?
Data released by MasterCard in 2015 showed that the majority of transactions are still cash – a startling 65% – and it’s not just in South Africa where mobile wallet uptake is slow. The US only saw 21.9% of users take advantage of the digital wallet, with the debit card remaining the most popular mobile payment method globally at 55%.
So what is holding people back from the app that could potentially transform the way they pay? According to Accenture, consumers were not likely to shift from the devil they knew unless mobile wallets came with significant advantages above and beyond those they already enjoyed. The results pointed to discount pricing and coupons and value-added services potentially swaying consumer opinion with a substantial 54% saying they would actively engage in a mobile payment solution if this was offered.
One of the biggest barriers to adoption is convenience. Users don’t want to jump through more hoops or be told that their method of payment isn’t accepted at the most popular stores. The digital wallet has to be like the debit card – convenient, reliable and secure. Fortunately, it is.
“The challenge is to show how the modern digital wallet actually does tick each and every one of these boxes,” says Mel Gischen, head of consumer business at PayU. “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.”
The registration process is no more lengthy and complex than that required by a bank and it allows instant access to a wealth of features a debit card doesn’t have. For online shopping there is no need to repeatedly enter card details into the payment page, just ensure the portal accepts the digital wallet, use your credentials and go. And feel assured sharing personal details with one trusted source rather than many.
“The PayU Wallet has been designed to provide consumers with as broad a reach as possible when it comes to shopping,” says Gischen. “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.”
Users don’t need to hunt for ATMs or stand in queues or stress about fraud and this makes payment a lot less frustrating. And there are quite a few bonuses built in to the leading solutions that give them an edge.
Today, digital wallets can include a variety of value-added extras where you can pay subscriptions to services such as DStv, sort out bills whenever it’s convenient for you and even play the lottery.
Prepaid airtime, electricity, data and even movies can be bought using the digital wallet. “We have added in some features that are uniquely suited to the South African space, says Gischen. “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.”
Despite these features, digital wallet adoption can be improved. South Africans need to see how this digital wallet app gathering dust can be transformed into a quick and simple online and offline mobile shopping portal and assured of its security and versatility.
“Once people realise how simple the digital wallet is to use and how much convenience it adds to their daily lives adoption figures will change,” concludes Gischen. “The times are already changing and we believe that the digital wallet is on the edge of a payment revolution that will transform the way South Africans shop and handle their money.”