Why SA banks hold the key to mobile payments


For the South African market to reach the critical mass that will drive the mainstream adoption of mobile payments, consumers need a system they can trust. This is arguably where local banks can – and should – play a pivotal role, writes Dewald Nolte, senior vice president for partnership and alliances at fintech company Entersekt.

Over the past two years, mobile payment providers have undoubtedly made an impression on the South African market. That said, there is still widespread scepticism and fear associated with these new platforms. As it stands, there is a palpable imbalance between the available merchant acceptance points for mobile payments, and the number of consumers who are willing or enabled to use these tools.

The S-factor

Unsurprisingly, in a market that is still fairly young with regard to digital uptake and online savvy, the main barrier to adoption of mobile payment platforms remains the security factor. People are understandably reluctant to hand over their personal and financial information to third parties with unfamiliar names and unfamiliar digital functions. Every day, consumers are warned about sophisticated cybercriminals, and news stories of identity theft and corporate hacking abound.

Yet despite their fears, consumers are looking for new and more efficient ways of paying on the go. Many are recognising the benefits of cashless payments, particularly with services such as Uber gaining popularity. A nation so accustomed to tipping – take the ever-present car guards, for example – would surely welcome a way to make small payments to individuals via their mobile phones.

As e-commerce gains traction and more South Africans become comfortable with shopping online, their appetite for mobile payments will only increase. Indeed, as 2016’s Black Friday retail bonanza demonstrated, local e-tailers need to explore more efficient and seamless payment mechanisms in order to avoid the site crashes that plagued many stores on the day.

Banking on consumers’ trust

From a psychological point of view, banks have already done the legwork in terms of winning customers’ trust and loyalty. Most people have been banking with the same bank for years, and although there might be minor irritations from time to time, they generally trust the brand. Banks therefore have a major advantage over new mobile payment players, one they can leverage in order to shift the mindset of local consumers.

Banks are also ideally positioned in that customers are already beginning to use banking apps for their monthly debits and payments, so making the leap to using the same app or ecosystem for small daily payments should be relatively straightforward. And instead of having to sign in and out of different apps all the time, they can simply stay within a central platform.

Harnessing mobile moments

Banks’ mobile strategies are already shifting from “mobile first” to “mobile always”. With consumers now relying on their mobile phones for everything from weather updates to navigation, banks have the opportunity to exploit what research firm Forrester has termed mobile moments – “points in time and space when people pull out their devices to get what they want in an immediate context”.

Consumers want to make fast and secure payments on the go, and banks are the natural facilitator of this. According to Forrester analyst Jennifer Wise, “consumers already feel weighed down by the number of touchpoints that currently exist, so expect to see point solutions condensing in the coming years”.

For smart banks, the year ahead represents an opportune moment to win over new customers, as well as to strengthen relationships with existing ones, by providing the much-needed impetus for the adoption of mobile payments.


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Key players from Africa's startup and investment ecosystem post on issues close to their heart for Disrupt Africa.

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