Apple Pay domination in South Africa
At least four of South Africa’s largest banks have recorded a big surge in digital wallet usage in the first half of 2024, with Apple Pay being the most popular option for most customers.
Digital wallets enable banked customers to link their cards to a near-field communications (NFC)-equipped smartphone or smartwatch and use them to make contactless on point-of-sale terminals instead of using their cards.
The apps not only make it more convenient to pay by eliminating the need to carry around your wallet or take out a card but can provide an additional layer of protection against thieves.
Apps can be set to only allow payments after entering a PIN or authenticating biometrically — through a fingerprint or facial ID scan.
The current digital wallets supported by South Africa’s major banks include Apple Pay, Fitbit Pay, Garmin Pay, Google Wallet, Samsung Wallet, and SwatchPay.
FNB recently shut down its in-app FNB Pay tap system, although it still supports third-party wallets.
However, the change meant that FNB’s Huawei users without Google Mobile Services (GMS) lost smartphone tap payment capability.
Fortunately, smartphones with NFC capability — a feature previously reserved primarily for flagships — have become more affordable.
A good example of this is the Samsung Galaxy A55, which has retail price of R9,999 but could be found selling for R8,800 on Takealot at the time of publication.
There are also numerous older flagships and mid-range devices from various brands below that price with NFC support, primarily Android devices that can run Google Wallet.
MyBroadband asked South Africa’s major banks about trends in digital wallet usage in the first half of the year.
The four banks that responded to our query all experienced substantial growth in the payment method. Three of the four said that Apple Pay was their most popular option.
Below is more detail about the feedback that each bank provided.
Absa
Absa card issuing executive Tshipi Alexander said the bank’s digital wallet enrollments had increased by 20% in the past three months.
Year-on-year, digital wallet transactional values increased by 75%.
Alexander said Absa observed Fitbit Pay usage decreasing due to Google incorporating Fitbit Pay devices into Google Wallet.
“Of the digital wallets available, Google Wallet has now surpassed Apple Pay in transactional value growth among Absa’s customer base,” Alexander said.
Capitec
Capitec was a bit late to the digital wallet adoption party, beginning with the launch of Samsung Pay (renamed to Samsung Wallet) in July 2022.
Absa and Standard Bank had already launched support for Samsung Pay in 2018, with FNB following in 2019 and Nedbank in 2020.
Nonetheless, Capitec customers have embraced the payment method in the past year.
Capitec recorded an enormous 238% increase in digital wallet values and 225% in volumes between June 2023 and June 2024.
Like with Standard Bank customers, Apple Pay was Capitec’s most popular wallet — at least in terms of transaction values. It accounted for 77% of Capitec customers’ total digital wallet spending.
Nedbank
Nedbank solutions innovation executive Dayalan Govender confirmed the bank also had a significant increase in digital wallet transactions in 2024.
“This is a result of clients adopting and trusting mobile devices more as well as a spin-off of our digital transformation strategy which is focused on driving wider mobile adoption by our clients,” Nedbank said.
Govender said Apple Pay was also Nedbank customers’ most used digital wallet.
Standard Bank
South Africa’s largest bank by assets — Standard Bank — said its customers’ digital wallet transaction values increased 76% and transaction volumes 71% year-on-year during the first six months of 2024.
The bank’s in-house SBG MobilePay wallet saw the biggest growth of 281% in transaction values and 206% in transaction volumes.
However, the largest contribution overall came from Apple Pay customers — which accounted for an astronomical 86% of the total value and 82% volume.
The bank said the typical Apple Pay customer’s profile showed they often explored the brand’s full capability.
Samsung Wallet accounted for the second-highest transaction values and volumes.
Standard Bank attributed the increase to higher penetration of smartphones with contactless payment capability.
The bank also added that QR code payments had grown significantly, with 370% and 453% increases in transaction values and volumes, respectively.
However, the total value in this payment category was relatively small compared to tap digital wallets.
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