We need to stop using credit cards in South Africa

While restaurants are getting rid of plastic straws and stores make you pay for plastic bags, there is another “plastic problem” in South Africa – credit cards and loyalty cards.

This is according to Zapper Chief Product Officer Brett White.

“A cashless, cardless system could be a reality right here in South Africa, right now – all we need is for the retailers and banks to get on board,” said White.

This is thanks to the ubiquity of smartphones.

“We live on our phones. Mobile commerce, or mcommerce, is a way of life. And the technology exists not only to pay, but to earn loyalty points and redeem rewards seamlessly, with your phone. No cards,” said White.

“Countries like China and India have almost entirely eradicated cash and cards. Consumers pay for just about anything, anywhere, using their phones through apps such as AliPay and WeChat Pay.”

These apps provide customers an easy, frictionless payment experience – while gaining greater insights into customer behaviour and enabling them to increase customer loyalty through personalised discounts and promotions.

Top security

Another factor to consider is that in South Africa, cash and credit cards present security and fraud risks.

This is true for both retailers and consumers, said White.

“Card skimming and cloning, and cash-in-transit and mall heists, are a reality, particularly during peak holiday periods,” he said.

Mobile payment apps not only remove this risk, but provide added layers of security for users.

This includes your smartphone password or PIN, face or fingerprint authentication, and in-app card encryption, tokenization, 3D secure, and anti-fraud algorithms.

Loyalty cards

White said the case for mobile payments is further bolstered by our interaction with loyalty programmes.

“South Africa has the highest adoption rate of loyalty programmes in the world, according to research firm AC Nielsen – with almost two-thirds of the population belonging to more than one programme,” said White.

“This means a plastic store card for every outlet – and often for every family member who frequents that outlet.”

He stated that the more “tech-savvy” brands have attempted to address this with loyalty apps, which are often poorly built, but these companies are replacing one flawed model for another.

“Either way, both analogue and digital loyalty programmes are complex to manage and expensive to run, and leave consumers with an inferior payment experience, riddled with awkward friction,” said White.

“We’re all familiar with the ‘have your store card ready’ scenario, and most of the available digital solutions overlook the frustration and awkwardness that comes with instructing the cashier that you want to redeem a discount, then fumbling through multiple screens on your phone.”

This can be remedied with a mobile payment solution that is agnostic of brand, mobile platform, or bank, said White.

“We should be able to open a single app, pay, accrue points, and redeem discounts discreetly, all within the comfort of our phone.”

Now read: Michael Jordaan’s prophetic Twitter post

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We need to stop using credit cards in South Africa