Presented by Mastercard

How Mastercard’s digital payment drive is growing financial inclusion in South Africa

As a leading payment technology provider, Mastercard is helping South African fintechs and businesses drive digital growth and foster financial inclusion.

This is according to Vice President of Business Integration at Mastercard in the Middle East and Africa, Gabriel Swanepoel.

Swanepoel explained that the regular, broad digitalisation of various industries has now been accelerated by the COVID-19 pandemic, with payments also impacted.

Consumers have increasingly adopted digital, cashless, and contactless payment methods – primarily out of a concern for safety and for improved convenience.

This trend plays well into Mastercard’s focus on displacing cash, which holds many benefits for consumers, governments, businesses, and merchants.

“Cash is the enemy of financial inclusion and of the poor. Too many South Africans still need to trade off the demands of an hourly job with the need to travel long distances to access cash or stand in line to pay a bill. Many consumers also face the dangers of being robbed when they come home with their wage.

“We believe a world without cash makes for a more frictionless user experience, and it’s one of the primary tools for bringing people in from a financial inclusion perspective,” Swanepoel said.

Swanepoel also explained that many of the digital payment methods growing in popularity in recent years are underpinned by Mastercard technology.

Mastercard enables payments across numerous existing and developing digital platforms and channels, including virtual cards, QR codes, and traditional checkouts on ecommerce sites.

QR code payments

Swanepoel went on to highlight two key areas in which Mastercard was contributing to the migration to digital payments in South Africa.

The first is in QR code payments, which has been a core component of Mastercard’s strategy in South Africa over the last five years.

“We’ve significantly grown the QR footprint in South Africa and managed to bring in a lot of small business into the formal environments just because of the lower price point in utilising QR,” Swanepoel said.

“For the cost of putting a QR code on a piece of paper, you’re allowing a small business – like a spaza shop – to accept electronic payments.”

Banks have embraced this technology as well, as evidenced by FNB recently announcing all of its POS devices now support QR code payments, powered by Mastercard’s Masterpass.

Masterpass is now accepted at more than 300 000 merchants and billers across South Africa.

Online payments

The second environment in which Mastercard has played a significant role is in ecommerce.

Swanepoel noted that annual consumer spend in this industry in South Africa has grown 600% from R2 billion 15 years ago to R14 billion in 2020. And, according to recent Mastercard research, 68% of South Africans are shopping more online since the onset of the COVID 19 pandemic.

“We don’t even know yet what that impact is going to be in a post-COVID world with new channels being available both, on the merchant and consumer side,” Swanepoel said.

Many of these online payments are made possible by technological assets that Mastercard provides to fintech communities and start-ups.

To this end, Mastercard recently launched its Fintech Express Programme, which has helped create partnerships and processes between banks, fintechs, and other stakeholders to deliver digital payments in a more dynamic way.

The payments technology company also recently announced a collaboration with Standard Bank, and Google to help SMEs move their businesses online, accept digital payments and attract more customers.

Through the collaboration, SMEs can get free access to Standard Bank’s SimplyBlu, an all-in-one e-commerce solution powered by Mastercard Payment Gateway Services, plus free Google Ads to the value of R500. These capabilities have been packaged as a bundled solution to help support business owners to tackle the economic challenges posed by the COVID-19 pandemic.

Click here to learn more about Mastercard in South Africa.

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How Mastercard’s digital payment drive is growing financial inclusion in South Africa