Despite a constrained consumer environment, Absa has seen annual growth of 25% in “card not present” (e-commerce) turnover during the first quarter of 2024.
As the payments landscape continues to evolve and innovate, data from Africa’s largest merchant acquirer underscores that consumers are increasingly shopping online and embracing new payment methods where a credit or debit card is not physically present, including online purchases and digital wallets.
While Absa’s data shows that the average value of instore purchases has reduced from roughly R500 per transaction to less than R340 over the last few years, the average value of online transactions has increased from R270 to R480 during the same period.
The adoption of contactless payments, which allows customers to simply tap their card, smartphone or wearable device, has been steady at around 10% of overall industry payments, and Absa expects that growth will be more pronounced in coming years.
“Despite the recent economic headwinds faced by businesses and consumers, local businesses have been resilient and have embraced new technology and collaborative practices to provide their customers with a world-class payment experience,” says Vish Chetty, executive for payments acceptance at Absa Relationship Banking.
“Not only have we seen the adoption of new complimentary services, but also adjacent services to help with cost reductions, easier access to working capital solutions, digitised solutions like instalment payments with no interest charged, as well as alternate payment offerings at lower interest.”
The changing payments landscape has challenged stakeholders across the ecosystem including banks, fintechs, merchants and payment facilitators to up the ante with new cutting-edge solutions for all market segments, thereby enabling easy, fast and secure transactions.
Lineshree Moodley, country head for Visa, South Africa, says: “Our data and research shows the continuous growth of eCommerce, as consumers and businesses embrace digital transformation. We are proud to partner with Absa for the inaugural Commercial Payments Summit.
“This collaboration underscores our ongoing commitment towards working with individuals, financial institutions, governments and businesses to unlock innovative technologies and solutions, enabling an efficient, seamless and safe ecosystem, which fosters financial inclusion and paves the way for business and consumers to navigate the digital economy with confidence.”
The inaugural Absa Commercial Payments Summit will take place at the Sandton Convention Centre in Johannesburg on 16 April 2024.