Market Trends of South Africa Real Time Payments Industry
BFSI is Expected to Drive the Market
- The BFSI sector has been tremendously scaling up in the country. The landscape of payments is changing rapidly in the country, owing to the growing enterprises and consumer propensity toward digital transformation and the proliferation of smartphones. The technological advancements in smartphones, digital payment cards, and POS at retail terminals fuel the market's growth.
- Looking at the growing demand for real-time payment in the country in January 2023, BankservAfrica is testing a new rapid payments program (RPP) platform in South Africa.
- Many vendors in the market are innovating their payment gateway. For instance, Mastercard, a prominent player in the global payments industry, and Network International of Digital Commerce in the Middle East & Africa (MEA) region announced a partnership to launch a new digital platform across the region.
- Moreover, Ozow raised a USD 48 million Series B to provide more alternative payment solutions to millions of merchants and consumers. Such developments are expected to drive the market forward.
- Furthermore, the Project is testing DLT with trading and settlement in a PoC environment. There are several names from the industry as a part of the Project: FirstRand, JSE Limited, Absa, Standard Bank, and Nedbank together formed the Intergovernmental Fintech Working Group (IFWG). Such developments are also expected to drive more demand in the market.
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Retail Sector is Expected to Hold a Significant Market Share.
- The payment market is changing in line with consumer behavior. The cashless economy, mobile banking, instant payments, digital commerce, and the growing impact of regulatory agencies are a few trends affecting the payment market.
- The country has been witnessing increased real-time payments in the retail sector. More people are increasingly shifting from cash transactions to cashless. According to Worldpay, the share of cash transactions in the retail industry was 57% in 2017. This significantly decreased to 35% in 2022. This suggests an increased demand for real-time payments in the country.
- This has influenced many global players to provide payment services in the country. For instance, in June 2022, Payment solutions firm PayU revealed its plan to boost its footprint in Africa. In South Africa, PayU is updating its product through its partnership with Payflex.
- Brick-and-mortar retailers are all set to change in-store experience to compete with the e-commerce industry by adopting mobile pay-and-go shopping. Mobile pay-and-go solution is gaining momentum across the country, as retailers can increase their average revenue per user (ARPU), enhance customer experience, boost loyalty, and increase operational efficiencies. There is significant competition among digital payment providers in the e-commerce industry. Competitors include incumbents like PayPal, tech giants like Google and Apple, traditional institutions like banks and card companies, and a rising number of tech start-ups in South Africa.
