Payments Modernisation in South Africa - The Future of Payments is about Embracing Change

Banking and Payments companies should not be afraid of making changes, tackling legacy infrastructure, and embracing new technology. This was the key idea put forward at the ATMIA 2018 Banking and Payments Summit which was held in Cape Town recently.

The event, which was hosted by the ATM Industry Association (ATMIA) and Renovite Technologies, brought together senior representatives from banks, retailers, payments and banking solutions provider. The presentations and group discussions focussed on the trends across banking and payment channels and the need to modernise solutions to meet the needs of citizens and business industries.

Discussion was led by Andrew Dean, Managing Director of Calleo, who kicked off the session with an overview of some of the latest banking and payment trends in South Africa.

Dean showed that banks are seeing massive growth in their mobile and digital channels, with mobile channels showing growth of 20% to 30%+ and mobile application usage growing by 40% to over 100% across the major banks in South Africa.

This has led to increasing rationalisation of branch footprints across all the top tier banks, as customers change the way they interact with banks. More functionality is being moved out of the branch and branch footprints are reducing by roughly 5% per annum with transactions in branches reducing by 15 to 20%.

He also highlighted the growth being seen across payment channels, with card processing value growing by approximately 20% per year and ATM usage growing at 10% per year, showing there is a lot of growth and opportunity in the space. Banks are also growing their ATM footprint, and investing in ATMs with higher functionality, to encourage greater self-service from customers.

Leading on from this discussion, Mike Lee, CEO of ATMIA, gave an overview of the Next Generation ATM Consortium. This is a project that ATMIA has undertaken in conjunction with a number of industry stakeholders to develop a blueprint for the ATM of the future.

According to Lee the project is gathering steam and has completed 5 of its 10-step plan to implement a blueprint for a new API App model for ATMs.

David Smith, the product manager at Renovite and Martin Grunewald, Chief Payments Officer at BankservAfrica, also shared their experience and insight on the future of the payments environment.
Smith spoke on the importance of looking forward when it comes to payments technology, and not being constrained by your current or legacy infrastructure.

This message was mirrored by Grunewald, who gave an overview of the payments modernisation initiative that BankservAfrica is currently embarking on, and how it will be a key driver in the future digital economy.

The key lesson of the day was that while it is easy to keep a system as it is, the more entrenched it is therefore more difficult it is to make a change and do something innovative.

It is therefore important for industry players to look at the market segments they are serving and evolve to address South African payments modernisation initiatives, global innovations and trends, and the needs of our local citizens and businesses, by providing them with choice and seamless experiences.