Pandemic forces consumers into digital world of payments and they like it

The pandemic changed the way we live and nowhere is it more clear than in how and where we spend our money nowadays, with buying everything including the kitchen sink online and opting for contactless payments.

Statistics from Standard Bank’s card division shows a dramatic shift in payment behaviour during the lockdown period between April and September.

“Consumers opted to pay via online banking, our mobile app banking or tap-to-pay,” says Ethel Nyembe, head of card and payments at Standard Bank.

Over the six-month period, 20% of all Standard Bank credit card transactions were done online, while 17% were contactless payments compared to 7% before lockdown. The data also showed a 84% increase in the value of online spend at supermarkets and grocery stores year-on-year, while the increase in value of spend at online general merchandise stores increased by 458% year-on-year.

Contactless spend at petrol stations increased by 608%, by 179% at wholesalers and 137% at supermarkets and grocery stores compared to the same time last year. Only online buying of airline tickets decreased by an unsurprising 74%.

Standard Bank has also seen an increase in the use of its virtual cards, accessed and set up via its app to avoid exposing their credit or debit card details.

Customer spent more online at:

• Bookshops – 292% more
• Clothing and accessory stores – 103% more
• Charitable donations – 56% more
• Point of sale – 30% more at grocery stores and supermarkets
• Hardware stores – 25%
• Computer and electrical stores – 30%
• Nurseries and florists -34%.

While these businesses were seeing increased spending, others were not so lucky. Customers spent less online for:

• Barbers and hair salons – 7% less
• Watch and jewellery stores – 42% less
• Clothing and accessories – 10% less
• Local travel – 79% less
• Universities and colleges – 14% less.

There was also a 15% decrease in total value of cash transactions over the lockdown period.  The total value of SnapScan spend increased by 15% since the start of lockdown, Instant Money increased by 6% and spending on MasterPass was up 30%.

However, Nyembe warned that vishing has become a growing concern in recent months and is more common with the increase in mobile banking. A vishing scam is where fraudsters impersonate a bank’s official or service provider and ask customers to provide their OTPs, usually telephonically.

“It is important for customers to know that the bank will never ask for your account details, password, PIN or OTP over the phone – when you get a call and you are asked for these, it is essential to never provide these details,” she says.

For more news your way, download The Citizen’s app for iOS and Android.