Verifone Looks at Positive Commerce Trends in South Africa

Gabriel Swanepoel recently posted some interesting insights into the commerce trends in South Africa on the Verifone blog. Here is a look at what he had to say:

“If you were living in or visiting South Africa a decade ago, chances are most of your purchases would have been made by cash. Today, things are radically different – you’re just as likely to pay by card, voucher or even by phone.

South Africa’s positive economic outlook is driving new growth in electronic payments. This is not only changing the economy from cash to card but is also fuelling demand for more sophisticated prepaid and charge card products – as well as enabling mobile and online shopping.

In the past five years, payment card circulation has grown annually by 17.60%, according to Market Research Reports. In 2013 the value of card transactions was ZAR1.4 trillion (US$140.5 billion), an annual growth of 12.07%. This is expected to rise to ZAR1.9 trillion (US$162.6 billion) in 2018.

This is good news for the South African retail sector, where the cost of cash management alone is estimated to be as high as 1.5% of the sector’s total turnover, or US$1.1 billion, equivalent to 0.3% of GDP. For consumers, counting only their interest income forgone by holding cash, the cost is estimated at about US$200 million, or 0.05% of GDP.

The race to move the country to non-cash payments has been led by many technological developments such as the introduction of ATMs, wireless point of sale terminals, the increasing adoption of smartphones and more recently NFC.

As South Africans embrace these new platforms, it is becoming increasingly apparent that they also desire more value and services at the point of sale – from loyalty and promotions to the ability to buy and redeem vouchers, prepaid cards and coupons.

In addition, for many South Africans today, this new merchant infrastructure represents a huge opportunity – it is connected, secure and can transact across multiple platforms. Potentially it can enable consumers to access valuable ‘lifestyle’ services in a low-risk environment.

Consequently, our South African merchant customers have been increasingly asking for more value added service options – in particular the ability to sell vouchers, tickets and other prepaid services.

To this end, VeriFone Africa has teamed up with Vane Systems to create Ticibox – a new solution for the distribution and sale of dynamic virtual content such as airline tickets, event tickets, accommodation, pre-paid airtime and pre-paid electricity from a variety of customer touch-points – over the counter, kiosk, self-service or wireless PINpad.

To enable greater uptake of these new services, we recognise the need to keep it simple. Ticibox offers a total solution in a box, easy set up without lengthy accreditation or training – with merchants guaranteed revenue with every transaction.

There is no doubt that South Africa represents a highly dynamic evolving market, as payment evolution in the region continues, we are committed to responding with innovative, pragmatic and secure solutions that help enrich and enable merchants and consumers alike.”

See more on the Verifone Blog

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