Forthcoming strategies from payment network operators Visa and Mastercard will be the main drivers of growth in the digital payments markets.
This is according to a newly released Juniper whitepaper: Who will own the digital payment sector in 2021? It states payments are expected to grow from $3.8 trillion this year to more than $5 trillion by 2020.
The whitepaper, compiled off the back of the institution's study, Strategies for Payment Providers: Opportunities, Risks & Competition 2017-2021, pointed to MasterCard's two-pronged approach: the company is developing partnerships with third-party wallets from players such as Apple and Samsung, while also introducing its own API-based wallet.
The report further found Visa has attempted to reduce friction in online payments by implementing the Visa Checkout, which is helping to increase conversion rates and overall online customer speed. The service allows users to enter all their personal details and card information, then use a single username and password to make purchases from online retailers.
Recently, Mastercard, through its Digital Evolution Index, rated SA as one of the fastest-growing digital economies in Africa, stating that online and mobile shopping has taken off in recent years, with all major banks offering free or relatively low-cost online purchasing capabilities to their customers.
In December 2016, Mastercard signed a strategic alliance agreement with Wari, a Senegal-based digital payments platform that aims to help strengthen the Wari offering for its users and the digital payment ecosystem in 35 African markets.
Geraldine Mitchley, senior director for emerging payments and innovation at Visa Sub-Saharan Africa, says despite e-commerce in the region still being in its infancy, the firm will continue to apply global strategies locally.
"South Africa still has a long way to go; only 4% to 6% of card transactions are e-commerce transactions, less for other countries in Africa, some under 1%. This means there is a huge growth opportunity off this low base."
Visa launched its Checkout service locally in 2016 and to date has gained momentum with local merchants, notes Mitchley.
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