QR payments become the norm in SA, PayFast finds
The uptick of online shopping in SA’s retail sector has fuelled the use of quick response (QR) code payments.
This is according to online payment gateway PayFast, which says it saw a 412% increase in transactions made with Masterpass between March 2020 and February 2021.
Masterpass is a free digital wallet from Mastercard that allows shoppers to scan a QR code for payment during the checkout process of an online purchase.
According to PayFast, it processed an 83% increase in total payment volumes and registered over 40 000 new merchant accounts since the start of lockdown last year, compared to the same period in 2019.
“Our data indicates the appetite for businesses to move online hasn’t slowed down,” says Jonathan Smit, MD and founder of PayFast. “Digital payments are increasingly becoming the standard for retail in our current climate, with almost seven million users on our payment engine over the past 12 months.”
South Africa has witnessed “explosive growth” in the digital economy and e-commerce sector. Since the start of the COVID-19-induced lockdown, e-commerce has seen a 40% increase in SA, and is expected to continue to rise.
A Mastercard consumer spending study found 68% of South African consumers are shopping online more since the onset of the COVID-19 pandemic.
Smit points out that some of the fastest new growth industries include online alcohol sales, bakeries with home delivery services, and e-commerce stores catering for pet supplies and jewellery, all of which have grown by between 1 000% and 3 000%.
This, he says, is based on the number of transactions from new merchants that signed up and started transacting for the first time over the lockdown period, compared to the previous year.
“More of these businesses are selling online directly to their consumers. Lockdown restrictions demonstrated the limitations of using indirect distribution channels such as wholesalers, retailers and restaurants, when consumers were unable or unwilling to shop in physical stores.”
Based on new accounts registered over the past year, PayFast reveals the top growing industries include the food and baby sectors. More traditional retail sectors, including clothing, beauty and homeware, have also leveraged the power of online stores to retain customers during this time.
“Considering the growth we recorded last year, we are confident we will continue to see the digitisation of payments across various industries, including retail, professional services and e-commerce,” says Smit.
According to Smit, PayFast also saw a 143% increase in mobile payments as more consumers shop online using their smartphones. “We’re seeing an increase in mobile payments processed through our payment engine across multiple payment methods, including digital wallets that scan QR codes, instant EFT and card payments.”