After 2023 was defined by economic challenges and unexpected disruptions, South African consumers are gearing up for a more resilient and predictable 2024.
The SpendTrend Report by Visa and Discovery Bank revealed a noticeable increase in online spending (up 13% compare to January 2019) driven by the widespread use of contactless payments. These transactions now make up two-thirds of all financial activities.
With digital payments expected to reach $23-billion in South Africa by 2024, the payment scene is transforming, emphasising seamlessness, simplicity, and better security. This has driven a promising shift towards a cashless society, according to industry experts.
Within this payments shift lies a unique opportunity for savvy consumers to jump into subscription services tailored to their needs. This not only applies to entertainment platforms like Netflix and Spotify, but mobile devices, home appliances, laptops, fitness gear, baby goods, and more.
According to Mishaan Ratan, co-founder of Rentoza, navigating the financial currents requires an understanding of the relationship between budgeting and subscription services.
“Budgeting is about more than just expense limitation; it’s about making informed choices,” he says. “If people do their homework, then subscriptions can become valuable assets, giving them both convenience and financial freedom. All of this is massively important to consumers being able to improve their own financial education and wellbeing.”
Ratan points out that subscription services play a crucial role in helping consumers manage their expenses more effectively by offering complete flexibility.
“With a month-to-month payment structure, people only have to pay for what they use. This gives them a clear view of monthly costs. Because there are no penalty fees for cancellations, this lets consumers adapt their finances to their needs.”
However, when it comes to financial security, Ratan says tracking subscriptions is crucial, especially as consumers rack up services they don’t fully use. He suggests striking a balance between usage and spending.
Looking at the years ahead, Ratan predicts subscription services will play a critical role in personal finance and household management. “Beyond traditional products and services, there are subscriptions for budgeting apps and financial advice. The subscription model lets consumers access financial management services more easily, allowing them to handle changing lifestyles better.
“This doesn’t just apply to single consumers,” he adds. “We even offer B2B subscriptions, so people can have personal product subscriptions, while also using subscriptions to help scale their businesses.”
When it comes to growth in digital payments, Ratan believes there is a significant opportunity on the horizon.