It has been well documented the myriad changes that the COVID-19 pandemic has resulted in, especially when it comes to the ecommerce and contactless payments space. This as paper-based money and transactions carry the natural risk of a higher chance of infection, as well as a general stigma in this current climate.
Curiously, it presents a great opportunity for the adoption of ewallet solutions and platforms, explains DPO South Africa (formerly PayGate).
“The spike in ewallet usage during the Covid pandemic is likely to encourage increased usage going forward. Many shoppers wanted to avoid contact during payment and so downloaded the wallets. After using the products for some months it’s fairly likely they will continue to do so going forward, but the real opportunity to maximise the growth will require some agile thinking,” notes Brendon Williamson, CSO at DPO South Africa.
As such, the company adds that platforms like SnapScan, Zapper and Samsung Pay, which are all considered ewallet solutions, have been embraced by many South Africans. That said, it seems like only those in higher income brackets have been able to access and enjoy such services.
“Wallets have traditionally been successful on the back of remittance in the lower-income demographic. The attraction of some of the wallets in not requiring a bank account is a strong adoption driver, but while South Africa is underbanked, it does not have a high unbanked population,” points out Williamson.
“While digital wallets will continue to show growth, perhaps not at the rapid rate that we are seeing in the mid- to higher-income demographics. Right now wallets are really speaking to the banked individual, looking for convenience and a low-contact payment method,” he adds.
As for how we get ewallets into the hands of more South Africans, particularly those in the lower income bracket, Williamson says much of the responsibility falls on payment vendors.
They will also play a key role as to how retailers and merchants make sense of the growing number of ewallet platforms cropping up, especially as it pertains to ensuring they are all catered for at the point of sale.
“Looking to the future it will be up to the payment vendors to differentiate their offerings. Whether it’s the ability to pre-fund their wallets so consumers can limit the amount available on the wallet, or if it’s the smart use of loyalty and voucher programs,” he highlights.
“It will be up to consumers to decide which value proposition creates the stickiness that keeps consumers engaging with the wallet,” says the CSO.
Also looking forward, Williamson says a significant consideration for ewallet platforms will be how easily they can integrate with loyalty programs like eBucks, Discovery Loyalty, and Momentum Multiply.
Digital storefronts will also prove an important element in future too, he adds.
“Wallets are more than just about making payments. You need to keep your customer in the app and using it for more than just fast, low-value payments. It’s about giving the customer extra value and the ability to cash out in a variety of ways,” says Williamson.
“Great experiences, a variety of options and meaningful value-adds could see wallets become a very real part of our daily lives in future. The best, and most efficient way to achieve this will be through industry collaboration,” he concludes.