Mastercard's New Payments Index 2022 Reveals South Africans’ Growing Appetite for Digital Payments

According to Mastercard’s New Payments Index 2022, a variety of digital payment methods are being adopted more quickly in South Africa. Consumers in South Africa are increasingly and actively using solutions like cryptocurrency, digital cards, biometric payments, buy now pay later (BNPL), and open banking for various financial transactions in their daily lives in addition to being aware of these technologies.

According to Mastercard’s New Payments Index 2022, 95% of South Africans used one or more emerging digital payment methods in the previous year. The survey revealed that while in-person transactions remain frequent, customers are making purchases in increasingly diverse methods, such as with loyalty points or store credit cards, and via a range of digital purchasing activities.

The use of developing digital payments is gaining pace despite the continued popularity of traditional payment methods like cash and inserting or swiping a credit card. In the past year, three-quarters of users have expanded their use of at least one new digital payment option. In the next 12 months, 97% of respondents said they expect to use a digital payment method, with account-to-account transfers (86%), applications for digital money transfers (81%), quick payment services (80%), and digital credit or debit cards (78%) topping the list.

According to Gabriel Swanepoel, country manager of Mastercard, Southern Africa, consumers in South Africa have consistently shown a readiness to adopt creative new technology.

“Consumers in South Africa have consistently shown a willingness to adopt innovative new technologies —card payments are no exception. At Mastercard, we are committed to understanding the unique needs and preferences of the people residing in the markets we serve, and to continue partnering with the public and private sectors to develop market-relevant solutions as we build an inclusive and connected digital future that works for everyone,” said Swanepoel.

The survey also revealed that consumers are increasingly using digital channels to pay their bills since they are more practical and improve money management. Sixty percent of South African consumers claim that utilizing digital tools has improved their ability to budget and manage their finances, and 51% claim that they use these tools to set up recurring payments. Overall, 84% of customers concur that they would like to be able to pay their bills or make purchases directly from their bank account without having to enter their credit card information.

The survey also showed that BNPL instalments are well known as a tool for budgeting, with 91% of South African consumers claiming to be familiar with the idea and 27% claiming to have used it in the previous year. Consumers desire BNPL’s flexibility and convenience, but they also desire the security that comes with dealing with a reputable source, such as a bank or payment network. In addition to having more purchasing power, consumers find BNPL handy for emergency situations and large-ticket purchases. In some use situations, such as as a tool for budgeting and financial planning, they also find it useful.