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South Africa – Contactless Payments and Vodacom’s new Plans for a Chinese-based Super App.

According to new Mastercard research 75% of South African consumers claim to be using contactless payments – for the following reasons:

    • safety and convenience – 47% of South African respondents have swapped their top-of-wallet card for one that offers contactless.
  • stopping the use of cash – 44%  said they have reduced their use of cash while 20% say that they have not used cash at all since the pandemic began.
  • concern over touchpads – 87% said they were concerned about the cleanliness of signature or touch pads, and 88% viewed contactless as the cleaner way to pay.
  • 79% claimed contactless payments are faster than cash, enabling customers to get in and out of stores quicker.
  • 69% agreed that contactless is now their preferred payment method. 71% said they prefer shopping at merchants that accept contactless.
  • 78% also say they will continue to use contactless post-pandemic.

Globally, Mastercard’s research shows over 40% growth in contactless transactions in the first quarter of 2020. 80% of contactless transactions are under $25, amounts that are typically dominated by cash.

Vodacom Group will create a ‘super app’ in partnership with digital payment provider Alipay, part of China’s Alibaba group, to allow consumers in SA to shop online, pay bills and send money to family from 2021. The app will also help SMEs access financial services such as lending and insurance. Vodacom and other mobile operators in South Africa are seeking to expand their mobile payment apps into online market places to leverage their network and customer base. They are also looking to engage the 11 million-plus South Africans who do not have bank accounts, to offer lending and other financial services. The super app, much like WeChat, a platform developed by Tencent Holdings in China, will be operated by Vodacom Financial Services, with Alipay as the technology provider.

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Alastair Tempest

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