David Pfaff, chief financial officer at Tyme Bank, has provided an overview of some of the key banking trends likely to emerge in South Africa in 2022.
Commenting in Payfast’s latest eCommerce performance index, Pfaff said that one of the most significant shifts would be fewer physical bank branches in South Africa.
“With the rise of mobile and internet banking, physical bank branches are no longer considered a necessity – in fact, most people would rather avoid them. In South Africa, low levels of digital literacy and high data costs mean that a hybrid approach is necessary to bridge the gap,” he said.
“At TymeBank, 85% of bank accounts have been opened at retailer kiosks in Pick n Pay and Boxer stores, while only 15% were opened online. The convenience of being able to bank at their local supermarket is a big draw factor for consumers wanting to avoid waiting in long queues, but who don’t have the resources to bank online.”
Pfaff said he also expects ‘buy now, pay later ‘ to become increasingly popular – especially among online shoppers who want to make purchases now but don’t have the immediate funds.
“Our data shows that the average transaction of a BNPL customer is significantly higher in value than immediate payments. This highlights the attraction BNPL holds for customers looking to avoid high-interest credit card fees, as well as its potential to benefit businesses catering to customers with various spending habits and budgets.”
Pfaff also expects multi-banking to grow as South Africans opt to open multiple accounts across several different banks.
“Over 50% of TymeBank’s customers are older than 35, which means many of them have had an existing banking relationship for at least 20 years – but are willing to give new banks a try.
“We’ve also observed the rising trend of people who are multi-banked, which is made possible by account aggregation technology that allows customers to safely see all their bank accounts on a single screen. Multi-banked consumers are utilising the ability to compare banking fees and benefits in order to tailor their own banking experience.”