SA slowly moving towards cashless society

While the usage of debit cards has grown significantly over the past few years, many South Africans still prefer to transact via cash.

This is clear from the findings of the 2012 Global Payments Tracker Survey conducted by Visa. The survey showed that despite the increased usage of debit cards, South Africa still has one of the largest proportions of banked individuals who are not yet cardholders, at 25 percent. Visa said this suggests strong growth opportunities in the South African market.

However over the years millions have embraced the debit card for everyday purchases which according to Visa signals a shift in the “cash is king” mindset that is typical of emerging markets. The Visa findings resonate well with the latest figures released by Bankserve which tracked card usage during December. The Bankserve data y indicates consumers mainly swiped their cards at supermarkets and service stations, followed by department stores and restaurants. The figures show that the largest number of card transactions (over 18 million) took place in general grocery stores and supermarkets. This was followed by 10.6 million of credit card transactions at petrol stations and their convenience stores. These two categories represented about a third of all known card transactions for the month of December.

Bankserve said the total spending via credit cards in December 2012 was estimated to have been over R116 billion. It is estimated that about R40 billion of card spending can be considered retail spending, whilst approximately another R20 billion can be considered traveling, eating out and entertainment spending. More or less R20 billion is car related (petrol, tolls, service, repairs, parts, etc.).

Visa’s survey reviewed 12 countries, including South Africa, USA, UAE, Australia and India, to gauge respondents’ views on their preferred payment habits.

“Our findings suggest that while cash still has a place in society, card usage in South Africa is steadily increasing as communities modernise and technology improves. Year-on-year, we’re seeing growing consumer confidence in debit cards as people see the benefits of using card-based payments, like convenience and safety,” said Herman Botes, Head of Debit for Visa in Sub Saharan Africa.

The study shows 41 percent debit card ownership in South Africa amongst the 1,600 respondents surveyed.  More cardholders in 2012 consider debit cards to be faster and more secure than cash, which is evident by the growing percentage of cardholders that use their debit card for purchases at the point of sale, rising four percent year-on-year to 72 percent.

Apart from a clear move away from cash, Botes said people were also increasingly using debit cards to better control their spending. According to the GPT 2012, there is a high percentage of point-of-sale active debit cardholders using this method of payment mostly at supermarkets, department and grocery stores, restaurants and at small retail outlets. The study shows that a growing percentage of cardholders consider debit cards to be more convenient for their everyday purchases.

Convenience and safety are rated among the top reasons for shoppers opting to go cashless with many believing that a card brings more personal safety than cash. The embedded security microchip and PIN is another feature that holds a strong appeal for debit cardholders.

“The survey, which reflects a natural progression towards convenient and secure payment methods, shows the success of efforts by major banks to stimulate financial inclusion and create awareness of how banking products can best serve people’s personal finance needs,” concluded Botes.

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