The digital payments revolution is slowly but surely taking hold and turning South Africa into a cashless society, a challenging task considering the strength of our informal economy but an inevitable progression regardless of where you sit on the curve. An increased shift towards digital payments to make purchases and transfer money could be a positive development for South Africa’s economy, as it reduces the cost of transactions and improves financial inclusion. As we peer into 2023 and beyond, we look at some of the innovative trends growing in popularity across the South African landscape:
Peer to Peer payments
Peer-to-Peer (P2P) payments are becoming increasingly popular in South Africa while already being extremely popular throughout the rest of Africa. These payments allow individuals to send and receive money quickly and easily, without having to wait for the funds to be transferred or for a bank or other payment terminal in the middle. P2P payments are also convenient, secure, and cost-effective. They allow users to send money to friends and family, pay bills, and make investments quickly and easily.
Digital Wallet Payments
The digital wallet revolution is changing the way people make payments in South Africa. Digital wallets are secure, convenient, and cost-effective, and allow users to store, manage, and transact with a digital (or virtual) wallet that acts much like a bank account but is housed on your device behind an encrypted layer. Digital wallets are becoming an essential tool for businesses and individuals alike as another layer on top of the central banking system. They allow users to make payments quickly and securely, and to store and manage their “digital currency” in one.
Mobile money is a form of digital currency that is stored in a digital wallet and used to make purchases online and in-store. It is a secure, convenient and cost-effective way to make payments. Mobile money is used by individuals and businesses alike and is becoming increasingly popular in South Africa.
Mobile money is a great alternative to traditional payment methods such as cash, credit/debit cards, and bank transfers. It is faster, cheaper and more secure than these methods. Mobile money can be used to pay for goods and services, transfer money to friends and family, and pay bills, without the intervention of a bank. It is also used to make investments and to receive payments.
Omnichannel payments are making considerable inroads in South Africa. These payments allow users to make payments using different channels such as mobile, online, and in-store, quickly and easily, and to access their digital currency from any device.
It’s no surprise then that the government initiative, The South African Rapid Payments Program (RPP) was launched in 2020. The program is designed to package the trends above into an accessible programme for the broader market, making payments faster, easier, and more secure.
The program is also designed to reduce fraud and improve financial inclusion in South Africa. It is estimated that by the end of 2023, the program will have reached at least 25 million people and businesses. Read our article on the RPP here.
These trends are transforming how businesses operate in South Africa, helping to reduce the cost of transactions and improve financial inclusion. Perhaps in the future – and sooner than we think – South Africa will be a completely cashless society, and businesses and individuals alike will rely on digital payments to make purchases and transfer money.
Contact Three Peaks today to find out how we can help you become part of the digital money revolution.