South African banks say they have seen significant increases in contactless and digital payments in recent months.
However, there is still little clarity on when popular smartphone-based digital wallets Apple Pay and Google Pay will be coming to South Africa.
According to Statista, the former platform had approximately 441 million users worldwide and reached 48% of the iPhone user base by September 2019.
Google Pay had an estimated 67 million users by the same date, driving over $110-billion (R1.8 trillion) in payments on an annual basis.
There are currently three third-party digital wallets of this nature available in South Africa – Samsung Pay, Garmin Pay, and Fitbit Pay.
The first is available on both smartphones and smartwatches, while the latter two are only supported on smartwatches.
Despite being a smaller platform than Apple Pay or Google Pay, Samsung Pay is supported on a variety of the company’s smartphones and offered by multiple banks – including Absa, Discovery Bank, FNB, Investec, Standard Bank, and Nedbank.
We asked South Africa’s major banks if they had any updates on if or when Apple or Google’s platforms will be available as part of their services.
Managing Executive for Everyday Banking at Absa Retail and Business Bank Cowyk Fox said it constantly considers various technologies as they become available to the market.
“We support digital wallets and to this end, in association with Samsung, we have offered Samsung Pay as a secure and simple payment solution to customers since 2018,” Fox said.
“Our adoption of wallet solutions is guided by the specific capabilities a particular product offers, as well as the potential for market penetration and adoption,” he noted.
Fox said it was up to the likes of Apple, Google and other technology companies to prioritise South Africa as a rollout country, which was a necessary precursor to Absa adopting and integrating these technologies.
“Absa will review these technologies as and when they are released to the market. We will inform customers of the availability accordingly,” Fox noted.
“Overall, we encourage the use of cashless transactions including digital payment and money transfer options during this time.”
Absa also supports QR code payments using Absa cards via MasterPass.
Head of FNB Retail Bank Payments Jason Viljoen noted that the bank looked forward to providing these digital wallets “as and when they become available in South Africa”.
He did not provide any further details on plans or dates to introduce the platforms.
FNB currently offers tap-to-pay on its cards, as well as the Samsung Pay, Garmin Pay and Fitbit Pay digital wallets, in addition to its own FNB Pay platform.
He noted that month-on-month usage of tap-to-pay payments increased by 35% – with values growing by 43% – while transaction volumes on scan-to-pay methods like QR code payments grew by 36% and values increased by 27%.
“We have seen a general upward adoption trend across all our digital payment solutions month-on-month,” Viljoen said.
“The latest digital payment trend we are observing is the accelerated adoption of Scan to Pay on the FNB App for seamless QR Code payments both at physical point of sale (POS) and for online shopping,” he added.
Nedbank previously told MyBroadband it was in discussions with Apple over support for its digital wallet in South Africa.
Executive for Emerging Payments at Nedbank Chipo Mushwana once again confirmed that the bank plans to support Apple Pay, but could not elaborate further on a timeframe for availability.
“We are unable to disclose the status of these discussions at this stage as it would be in breach of our current non-disclosure agreement,” Mushwana said.
She said that Apple and Google Pay would be available once Nedbank had engaged and finalised all necessary steps to enable each of them.
Mushwana added Nedbank had also observed an increase in contactless payments in light of the need for social distancing due to COVID-19.
“The adoption of QR codes payments has increased with the participation of new merchants such as retailers,” Mushwana said.
“Prior to lockdown, we noted that the number of contactless transactions in South Africa grew 13 times in March 2020 compared to March 2019 in the grocery and pharmacy categories, where many day-to-day essentials are being purchased and this has been accelerated due to the global pandemic,” Mushwana stated.
Capitec said that it was not able to communicate a date for availability of third-party digital wallets yet.
It added while Apple and Google Pay was not available in the market, it was working with other partners for its first NFC wallets.