Digital wallets and account-to-account payments are growing fast – but contactless cards are currently South Africa’s most popular way to pay.August 2021
By now, there can be no doubt that our economy is going digital, driven by the widespread adoption of mobile devices and consumer appetite for purchasing online, whether via computer or mobile device. In America alone, digital commerce sales grew by more than 32% in the last year to reach $794.5 billion, according to e-marketer.
Given this ongoing trend towards digitisation, banks are increasingly offering customers digital wallets for use in online and physical environments. This is understandable: digital wallets offer the attraction of adding more functions in the future, from loyalty schemes to micro-lending and insurance products, as well as today’s online and physical payments functionality.
Although NFC World reports the number of digital wallets will rise to 4 billion by 2024 with spending via wallets doubling by 2025, it’s important not to lose sight of the importance of cards now and in the future. Cards Plus is one of South Africa’s leading PVC card manufacturers and can confirm that consumers are still to a large degree reliant on the traditional PVC card whether its for payment purposes or for retail and loyalty activities.
The Nilsson Report 2021 tells us there are more than 22.1 billion payment cards in circulation, a number that continues to grow by around 4 percent a year.
For the foreseeable future, cards are still going to play an important role – indeed, evidence suggests that consumers still prefer to pay by card despite the growing range of options on offer.
A preference for contactless
In January 2021, research was conducted that shows contactless card transactions now account for up to 80 percent of all face-to-face payments in the UK, with similar results recorded in Norway and Sweden. In the United States, research from Visa also shows more than two-thirds of consumers prefer to pay with contactless cards as they are more familiar with them than with payment via a digital wallet on their mobile device.
Globally, COVID-19 has accelerated a move towards contactless transactions,
More opportunity, greater risk
Rising contactless limits offer consumers greater opportunities to pay safely and quickly in a wider range of situations. With higher limits, customers can pay for luxury items as well as everyday purchases using contactless. At the same time, higher limits bring with them greater risk, especially from lost and stolen cards. Criminals can quickly rack up high-value transactions on contactless cards, however quickly a loss or theft is reported.
Looking to find out more information on PVC card manufacturing in South Africa? please get in contact with Cards Plus on 011 894 3914