More consumer opt to make payments through the tap-and-pay method. Picture: iStock
More consumers in South Africa have moved to paying for their products and services in a modern way, instead of using the traditional method of inserting their bank cards in the machine or withdrawing money at ATMs.
Contactless payments are getting popular, as consumers opt to tap their cards, phones or even smart watches at stores.
Standard Bank has seen an increase in their clients making using of technology and digital wallets, as they account for 53% of all transactions, an increase from 42% of just two years ago.
The bank says it saw the biggest growth in 2023, with the value of contactless payments increasing by 37%. “This year alone, the growth has continued with an additional 14% rise.”
When it comes to income brackets, all their clients make use of the method, as they noticed a double-digit year-on-year increases in tap-to-pay transactions among both middle and high-income clients. However, only 81% of their clients make the use of the method regularly.
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Head of Credit at Standard Bank, Tumelo Ramugondo, says the shift to contactless payments by credit card users is popular, as 60% of their transactions are made through this method.
“Consumers are becoming more accustomed to the tap functionality, and it’s becoming increasingly entrenched among merchants across various industries.”
The tap-and-pay method is used mostly when paying for groceries, fuel, and utilities. However, Ramugondo adds that they have noticed a 23% year-on-year increase in contactless payments at clothing and footwear retailers this year, which reflects the expanding use of the payment method.
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He says the value of transactions paid via digital wallets like to devices like Apple Pay, Samsung Pay, Garmin Pay and Google Pay increased by more than 65% year-on-year at the end of August. “Digital wallet transactions now comprise 13% of all Standard Bank’s contactless payments transactions – up from 4% two years ago.”
According to their data, Apple Pay remains the dominant digital wallet. More people in the world started to use contactless payment after the outbreak of the Covid-19 pandemic.
Earlier in the year, First National Bank (FNB) announced they will be discontinuing the tap-and-pay option on their app to simplify user experience.
Jason Viljoen, FNB’s Head of Card Modernisation and Digital Payments, said since 2016 the method became a hallmark of the bank’s commitment to innovation. However, in light of the ever-changing digital payment landscape, FNB has decided to phase out its feature to make way for a more simplified banking app.
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