A deep dive into the evolving landscape of digital payments and consumer behavior in South Africa.
South Africa is witnessing a significant shift in consumer payment habits, with mobile phones replacing physical wallets for transactions. The SpendTrend24 report by Discovery Bank and Visa highlights how South Africans are embracing digital wallets, citing a 9% increase in usage in 2023 compared to the previous year. This trend is attributed to the convenience and security offered by digital payment technologies, which eliminate the risks associated with carrying physical cash or cards.
The report delves into regional variations, revealing that residents of Joburg, Cape Town, and Durban are leading the adoption of digital wallets. Joburg residents, in particular, use digital wallets for in-store purchases at 1.75 times more than the national average, showcasing a strong preference for cashless transactions. Additionally, online spending in South Africa has surged, growing five times faster than in-store spending in 2023, driven by factors such as same-day delivery services and increased online grocery shopping.
Despite the rise of digital payments, Euromonitor’s research indicates that South Africans still value physical shopping experiences, especially for groceries. Online grocery spending has seen a notable increase, growing by 10% in 2023 compared to 2% for in-store spending. This shift towards digital payments is expected to continue as contactless payments through smart devices and seamless omnichannel sales strategies become more prevalent, catering to consumers’ desire for a blend of convenience and tactile shopping experiences.