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Local banks expect bumper Black Friday online sales

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 29 Nov 2024
Banks have a positive outlook on online sales this Black Friday weekend.
Banks have a positive outlook on online sales this Black Friday weekend.

South Africa’s big-four banks anticipate a boost in online purchases today − Black Friday, which is considered to be the biggest shopping day of the year.

Absa, Standard Bank, Nedbank and First National Bank (FNB) say they expect significant growth in online purchases this Black Friday weekend − from Friday, 29 November until Monday, 2 December – compared to last year.

A Bureau of Market Research study, commissioned by fintech firm Capital Connect, found customers are planning to spend more online this Black Friday weekend than they did last year, generating R22.08 billion in direct revenue.

This is expected to drive total retail sales for November 2024 to approximately R136 billion, up 17.3% from the R116.1 billion recorded in November 2023, it says.

Privesan Naidoo, Nedbank executive: trading products VP, says: “Based on our data, we have seen double-digit growth over this period in online sales (card-not-present transactions) in November so far, and we expect an increase on Black Friday, especially with this week being payday.

“Black Friday has consistently been a peak period and we’ve noticed customers have gained confidence in online purchases. Customers are drawn to the convenience of online shopping and the exclusive discounts available online during this time.”

According to Naidoo, SA’s payments and e-commerce landscape has undergone significant transformation, from traditional cash transactions to modern digital platforms. The trend, which has seen online purchases showing steady growth, has largely been driven by a combination of technological advancements and changing consumer behaviour, significantly accelerated by the COVID-19 pandemic.

“This evolution has not only reshaped consumer behaviour today, but also opened new avenues for small businesses and unbanked populations, paving the way for broader economic inclusion. Understanding this journey is key to grasping South Africa's digital payments future and the opportunities it holds.”

The growth in online payments and digital innovations have democratised access to financial services, particularly for small businesses that now benefit from the ease and convenience of digital payments.

Black Friday is traditionally the day after Thanksgiving in North America, which marks the day when retailers move into profitable territory (the black). It has been embraced globally in recent years and is regarded as the start of the festive shopping season.

Privesan Naidoo, Nedbank executive: trading products VP.
Privesan Naidoo, Nedbank executive: trading products VP.

Absa says it has noted a significant increase in the total value of e-commerce transactions over the past year, while in-store (card present) transactions remain on the decline.

It has seen the total turnover of online shopping transactions increase 25% year-on-year in the first quarter, 16% year-on-year in the second quarter and 19% year-on-year in the third quarter.

“We observed a shift towards higher online spending, with fewer but higher-value transactions indicating a preference for larger purchases online,” says Chris Wood, managing executive for product at Absa Relationship Banking.

“In physical stores, both total transaction numbers and turnover are growing steadily, though at a lower average ticket price, suggesting consumers are making smaller, more frequent purchases. This trend aligns with general consumer behaviour in SA, where shoppers show confidence, but are mindful of purchase sizes.”

Although Absa typically sees transaction volumes peak on Black Friday, recent history suggests a significant portion of Black Friday or ‘Black November’ spending still occurs on the Monday after Black Friday, known as Cyber Monday.

Looking at Absa-issued cards specifically, average transactions per second peaked at 61 per second on Black Friday last year, dropping slightly to 57 per second on Saturday, and reaching 43 on Cyber Monday.

In anticipation of the surge in transaction volumes during Black Friday weekend, Absa says it implemented measures to bolster the resilience and capacity of its payments acceptance infrastructure, ensuring its fraud prevention capabilities will be on heightened alert.

FNB says the improved economic landscape and sustained recovery in consumer income, coupled with interest rate cuts and lower inflation, are likely to increase consumer purchasing power, boosting sales on Black Friday and Cyber Monday, compared to 2023.

With the increase in retailers offering extended specials over the course of ‘Black November’, the bank expects in-store and online spend to exceed R3 billion over the Black Friday weekend, and anticipates a significant shift towards digital payments.

FNB Card CEO Senzo Nsibande comments: “We are witnessing a convergence of factors that point towards a vibrant shopping season. Digital wallet usage is projected to surge by over 40% year-on-year, reflecting the broader trend of digital adoption among consumers.

“Online sales are expected to grow by more than 10%. Conversely, traditional in-store sales and cash usage is expected to decline.”

FNB Merchant Services processed 18.4 million in general spend transactions over the course of October, which is 400 000 more than in 2023. This early indicator led to a positive outlook, with an estimate of 19.5 million transactions expected to be processed by FNB Merchant Services this Black Friday, it says.

Senzo Nsibande, CEO of FNB Card.
Senzo Nsibande, CEO of FNB Card.

FNB has seen retailers and consumers embrace alternative ways of shopping, including virtual cards, digital wallets and scan-to-pay alternatives, Nsibande adds.

The bank’s data shows that while electronics and household items traditionally dominate Black Friday sales, there is notable growth in other sectors, such as travel.

“To mitigate the chances of falling victim to fraud, we urge customers to remain vigilant when making transactions. Most importantly, we want to emphasise the importance of never sharing one-time passwords, device passcode, PINs and CVV numbers,” cautions Nsibande.

Standard Bank expects the surge in online shopping to continue this year, after it recorded the highest increase in online sales in 2023, to date.

During 2023’s Black Friday weekend, its customers' online purchases surged by 17% compared to the same period in 2022, surpassing the highest growth recorded in 2021.

Digital wallets − including Apple Pay, Samsung Pay and Google Pay − accounted for 37% of all online purchases in 2023, it says.

Dr Belinda Rathogwa, Standard Bank head of digital and e-commerce, says the convenience of online shopping resulted in more clients purchasing online, which “shows a broader shift in consumer behaviour toward more convenient, efficient payment options”.

“However, cyber criminals also view this shift as an opportunity, prompting them to target online shoppers during Black Friday.

“Phishing attacks continue to be a significant threat, wherein fraudsters send deceptive e-mails pretending to be legitimate companies, such as retailers, streaming services and banks. These e-mails contain links to fake websites designed to steal sensitive information, like login details and PINs. Some scammers also entice recipients by promising rewards to the first few buyers, encouraging them to click on malicious links.”

Dr Belinda Rathogwa, Standard Bank head of digital and e-commerce.
Dr Belinda Rathogwa, Standard Bank head of digital and e-commerce.

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