More South Africans are expected to make payments through their mobile device next year, reports payment firm, Network International.
According to the group, recent reporting points to Africa accounting for more than 70% of mobile-money transaction value globally. This comes amid the South African payment industry expecting steady but cautious growth over 2023, said Network International.
“We see mobile payments in Africa continuing their upward trend, although they may not maintain the same aggressive pace. Growth will be driven by interoperability between multiple payment types.”
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“For instance, we will be using our phones to access mobile wallets to be used on a physical point-of-sale machine, bridging the gap between what has historically been either digital payments or a traditional card play.
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“We foresee a lot more integration between the store of value offerings, rather than pure mobile-to-mobile type interactions,” said Chris Wood, the regional managing director for Southern Africa at Network International.
Wood said that the focus of many payment providers in 2023 will be to ensure that their payment options work on as many payment acceptance mechanisms as possible, thereby extending their reach.
Moreover, as infrastructure improves and deepens, Wood said that people would be more inclined to use more reliable sources.
When looking closer at South Africa’s macro influences and unique landscape, Network International found that the next developments for payment systems are going to be in the Rapid Payments Programme (RPP).
RPP aims to allow for faster, seamless transactions through EFTs. The implementation of it, however, is still linked to whether banks will fully embrace it as regulators hope they will.
The governor of the South African Reserve Bank (SARB) Lesetja Kganyago said that RPP will also improve the transparency of payments for both payment service providers and customers.
“The migration will also pave the way for faster payments through the introduction of the Rapid Payments Programme (RPP), which is expected to be launched in 2023,” said Kganyago.
According to the Boston Consulting Group, the South African payments industry can expect steady growth, with Boston Consulting Group anticipating a revenue year-on-year growth of 9.5% for 2022.
The group also forecast global payment revenues to a compound annual growth rate (CAGR) of 8.3% through 2026.
Network International said that a major bugbear for payment systems to change in South Africa is the lack of specialist skills. Wood said that it remains a big hindering factor when it comes to continued innovation and growth.
“This is not to say that quality candidates don’t exist, only that the hyperregulated and technical payments environment will always have a need for deep experience. As we always say, this industry is actually very small,” he added.
One of the low-hanging fruits in the industry is converting consumers from cash to digital payments, however, the jury is still out on whether the conversion will be easy as the regulators are inclined to believe, said Wood.
“We are still waiting for that golden experience that will convert people from going to the ATM to withdraw money, but the real uptake in new payment methods still relies on merchant uptake of the new payments. We also know that customers are fickle so their first experience has to be good, otherwise they will just go back to what they know,” he said.
