Standard Bank propels contactless payments across Africa
Standard Bank Group, Africa’s largest financial services organisation by assets, is driving the mass adoption of contactless payments across Africa, as consumers look for safer ways to pay in the wake of COVID-19.
“The pandemic has created heightened concern among consumers on cash usage, with many increasingly recognising contactless as a safer, cleaner and faster way to pay, especially as they seek out ways to quickly get in and out of stores without touching terminals or handing over their card,” says Israel Skosana, head of card issuing, Pan-Africa at Standard Bank.
A recent study by Mastercard shows 70% of respondents in the Middle East and Africa are now using some form of contactless payment, citing safety and cleanliness as key drivers.
ITWeb this month reported that SA’s big-four banks have witnessed a drastic shift towards e-commerce and digital transactions by South African consumers, as they seek safer, more convenient ways of transacting during the national lockdown.
Standard Bank says it is enabling contactless payment capability for customers across 15 markets on the continent, including SA, Botswana, Ghana, Kenya, Zambia, Malawi, eSwatini, Tanzania, Uganda, Namibia, Lesotho, Mozambique and Zimbabwe.
“The introduction of this payment method will improve customer convenience, with shorter transaction times, and eliminates the need to withdraw or handle cash. Security is also enhanced as a customer keeps their card with them rather than handing it to someone else,” explains Skosana.
According to Standard Bank, cash still accounts for most payments in many of the African countries. Yet, it notes, as well as being inefficient to process and expensive to sustain, cash is inherently insecure, and its use fuels the shadow economy.
The bank points out the displacement of cash is, therefore, a strategic objective for many governments, banks, payment providers and, increasingly, merchants.
It believes that contactless represents a viable cash displacement tool.
In many countries around the world, says Skosana, the use of contactless payments has quickly become deeply embedded into everyday payment habits. The perceptions around convenience and safety have spurred the preference for contactless cards, he adds.
“COVID-19 has accelerated the issuance of contactless-enabled cards and the upgrading of merchant terminals to accept contactless payments. This comes in response to increasing demand from both consumers and merchants alike. Businesses are more reluctant to accept cash, consumers don’t wish to touch payment terminals, and everyone is more conscious of reducing their human contact.”
Prior to the pandemic, contactless payments were already emerging and growing within African regions; however, COVID-19 has encouraged consumers to further embrace the technology.
“As many countries in Africa imposed necessary social distancing, the act of running to the store to buy everyday supplies changed dramatically. This shift in consumer behaviour is particularly clear at till checkout points, with customers and merchants expressing a desire for cleanliness and safety at the point of sale.”
He points out the benefits of contactless technology extend well beyond health and safety, adding that it opens the door to payments in many other forms, such as smartphones and wearables.
The same underlying technology is used to process transactions, and the potential for mobile and wearable-enabled payments is significant, says Skosana.
“As Standard Bank, we are supporting the shift away from cash in our African markets to limit crime rates, improve convenience and safety for customers, and bring more people into the formal financial system to stimulate the continent’s growth and development.”