Big payments change in South Africa
South Africa’s payment landscape is undergoing a significant transformation, driven by evolving consumer behaviour, technological advancements, and new business models.
Because of this, several key trends are emerging that redefine how customers transact and businesses operate in South Africa.
These were some key findings of Network International’s 2024 Payfast State of Pay report, which unpacks “the convergence of commerce – an industry-defining trend that is set to drive consumer convenience and merchant efficiency to new heights.”
In it, Network International surveyed the Payfast by Network e-commerce merchant database to paint a clearer image of this evolving landscape.
According to the report, key trends impacting South Africa’s payment landscape include:
- The rise of online marketplaces;
- Evolution of customer expectations;
- Increased adoption of unified commerce;
- Diversification of payment methods.
A growing preference among South African consumers for online shopping, fueled by the convenience and accessibility of online shopping, which allows consumers to shop at their own pace, compare prices, and make purchases from the comfort of their homes, has greatly changed how businesses operate.
“The South African e-commerce sector is projected to exceed R400 billion in value by 2025, driven by an anticipated one billion-plus transactions a year,” said David Adams, Managing Director at Payfast by Network International.
The report indicates that 59% of consumers prefer to browse and purchase online, and as such, over 70% of merchants view them as an opportunity to expand reach, drive innovation, and promote growth.
The top three marketplaces for local merchants are Takealot, Amazon (South Africa), and Makro Marketplace, with Takealot being the most popular choice.
Unified Commerce
One of the most in-depth discussed topics in the report is the proliferation of ‘Unified Commerce’ in South Africa.
“Unified Commerce refers to a business strategy that brings together all store sales channels and activities on to a single system, giving merchants the power to offer a seamless shopping experience,” explained Network International.
This “isn’t a new concept – but for the first time, we have the technology and infrastructure to start implementing it in a meaningful way,” said David Adams, Managing Director at Payfast by Network.
“Essentially, it’s taking omnichannel commerce and ramping it up to the point that customers can interact with a business across multiple touchpoints and have a truly seamless experience,” he added,
According to the survey, a centralised omnichannel point-of-sale (POS) system emerged as the most common Unified Commerce strategy, with 41% of merchants currently using one to streamline payments and customer experience.
Of these, over 40% reported that it resulted in higher customer spend.
Other insights
In terms of other notable insights – the average transaction value across all payment methods on the Payfast by Network platform is R673.81.
The report also indicates a growing trend towards payment method diversification, with merchants offering an average of at least two payment options to their customers.
This diversification reflects the evolving preferences of South African consumers and highlights the need for businesses to cater to a wider range of payment choices.
Overall, mobile wallets and open banking solutions like Apple Pay, Samsung Pay, and Capitec Pay have grown significantly, indicating a growing familiarity, comfort, and trust with the adoption of digital payment solutions.
Additionally, Monday emerged as the most popular day for online shopping, and November named the most popular month, as customers take advantage of Black Friday sales and prepare for the festive season.
As per the report, 71% of merchants surveyed expressed a positive sentiment about the upcoming festive season which is also the busiest retail time of the year.
The full report can be found below:
Loading ...
