• A new Mastercard study published in the final months of 2022 saw that 95 percent of SA consumers taking part used at least one digital payment method last year.
• A further 71 percent said they used fintech for five or more finance-related tasks last year.
• As the convenience of digital financial tools grow, so will the popularity of cash, cards and devices begin to wane.

A Mastercard report published at the end of 2022 titled New Payments Index 2022 found that 95 percent of South African consumers taking part in the survey used at least one emerging digital payment method last year.

Further, it found that consumers are turning more and more to digital tools to facilitate their everyday financials with 71 percent of respondents using fintech for five or more financial tasks. Of these, banking and paying bills through digital tools are the top use cases.

A similar study conducted in 2021 found that fintech continues to explode in popularity across Africa, where the number startups in the finance industry on the continent grew by 81 percent that year.

This latest 2022 study found that not only are consumers turning more and more to digital financial tools, but they are also becoming more readily open to innovative technologies in finances.

One of these is biometrics, where 75 percent of respondents agreed that it is easier to make payments using biometrics than a card or a device.

As convenience is the heart of technological innovation, especially in fintech, these results do indicate some future where cards or devices are no longer required and people will be able to access funds and banking information with a thumbprint or retina scan.

And another thing is clear: cash is no longer king.

An overwhelming 97 percent of those surveyed at the end of 2022 indicated that they are likely to use a digital payment method in the next 12 months, with account-to-account payments (86 percent), digital money transfer apps (81 percent), instant payment services (80 percent), and digital credit or debit cards (78 percent) topping the list.

Yet many merchants, especially small or informal traders, still prefer or even rely on cash payments. There are many reasons.

Some believe they need to be a certain size or have a certain level of income to qualify for a machine that can process digital transactions. Others are concerned about the costs of transacting on such a machine. And some are, quite simply, used to doing things a certain way and resistant to change.

Yet the consumer situation has changed drastically to how it was not 10 years ago. Mastercard, in a press release, indicates that today most consumers are highly banked and avoid carrying more than R300 in cash for safety reasons, but the fact remains that they do still carry some cash for small transactions.

The New Payments Index 2022 research was conducted by The Harris Poll and Mastercard Global Foresights, Insights and Analytics from 21st March to 21st April 2022 among a nationally representative sample of 1 000 adults in South Africa.

This forms part of a broader global study where 35 040 adults were surveyed.

[Image –Jonas Leupe on Unsplash]