Why there are so few contactless card machines in South Africa

South Africa is still mainly a cash economy, although alternative payment methods such as credit cards, NFC, and QR codes are becoming increasingly supported.

The number of bank cards in circulation which support NFC payments have also increased, although the number of payment terminals which accept NFC payments have lagged behind.

Even now that many retailers have upgraded to NFC-compatible POS terminals, it is still impossible to rely entirely on contactless payments.

Instead, you will still need to carry your bank card or rely on apps like Samsung Pay which use Magnetic Secure Transmission technology in addition to NFC to support.

MyBroadband spoke to major South African banks to determine why it has taken so long to roll out NFC-compatible payment terminals to all merchants.

Standard Bank

Standard Bank did not provide comment on the obstacles hindering the rollout of NFC-compatible payment terminals, but stated that adoption of the technology was growing.

“As South Africa’s largest card issuer of contactless cards, we are observing a growing trend where 9% of card present transactions are done via NFC technology,” Standard Bank said.

“With the introduction of NFC usage on Samsung phones in South Africa, we expect exponential growth as consumer have more ways to pay,” the bank added.

The bank said another factor which will increase the adoption of contactless payments will be the introduction of contactless payments in South African transport, such as toll roads, trains, and taxis.

Standard Bank logo


FNB said that 80% of its POS terminals across the country are NFC-enabled and it is actively replacing older devices with contactless-enabled hardware.

“This is in line with our commitment to help our merchants to keep up with the consumer-driven demand for contactless payments,” FNB said.

“We believe that a universal adoption of NFC-enabled POS devices will significantly improve the safety and efficiency of payments for merchants and consumers, and curb queues by improving the speed at which transactions can be processed.”

The bank added that the rollout of NFC-enabled terminals is partly restricted by legacy infrastructure, but added that South African merchants are becoming increasingly aware of the benefits of contactless payments.

“The logistical considerations include the manual exchange or replacement of old devices with the new NFC-ready terminals,” FNB said.

“In addition, the migration has a cost implication for a business and operationally, there are other considerations that any acquirer needs to take into account.”

The bank added that the frequency of contactless payments by FNB customers increased by 100% and 300% on credit and debit cards respectively.

By 2018, FNB said it had over 8.5 million contactless-enabled debit and credit cards in the hands of consumers.

iPhone 6S FNB


Nedbank card and payments acceptance executive Mpho Sadiki told MyBroadband that all of Nedbank’s systems are contactless-enabled.

“At Nedbank specifically, all of our POS systems are contactless and are enabled for merchants to accept contactless cards and NFC-enabled phones for payments,” Sadiki said.

“Nedbank began its rollout of contactless terminals in 2013 and completed the rollout to all our clients in 2016.”

“From a Nedbank perspective, we issue contactless cards on all our primary debit and credit cards,” Sadiki added.

New Nedbank logo


Absa relationship banking managing executive Carel Grönum told MyBroadband that the percentage of POS systems in South Africa configured to accept contactless card payments is about 75% to 85%.

“The devices that cannot process contactless cards are being phased out and removed from the field entirely,” he said.

Grönum said the rollout had been slowed somewhat because not all devices were enabled to provide the functionality from a hardware perspective – and these units were not yet fully depreciated.

“In the early days of contactless, the functionality was used mainly in the transit space. There were very few consumer cards that were enabled for contactless processing and consumers were skeptical and reluctant to use them,” Grönum said.

“Certification processes for both the card and POS device are not a simple process and it took a while to get the process bedded down.”

Grönum told MyBroadband that approximately 18% of the bank’s daily transactions consist of contactless cards, but this number is growing.

Absa logo

Now read: TymeBank officially launching in South Africa

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Why there are so few contactless card machines in South Africa