Digital payments are surging in South Africa as more people tap or scan to pay from their smartphones rather than using cash or cards. A report from Discovery and Visa finds that digital wallet usage grew 9% in 2023 with 60% of South Africans preferring digital wallets for security, convenience, and easy payment tracking.
TCL looks at the trends.
A daily convenience
Just a few short years ago, mobile payments were a niche service that catered to a small market of tech-savvy users. Since then, digital wallets and mobile payments have spread from upmarket suburban coffee shops to major retail chains, ecommerce apps, and even informal traders.
Digital wallets are becoming a popular alternative to cash because they make it faster and easier to pay anyone anytime, anywhere, without needing physical cash or cards. They can be safer and more secure than cash and plastic, integrating features like biometric authentication, tokenisation, and two-factor verification.
Digital payments also offers some value-added features. Some apps, for example, make it easy to split restaurant bills with friends or transfer money to other individuals. Others integrate other digital services—for example, storing your loyalty cards or offering merchant rewards.
How digital wallets work
Most digital wallets and mobile payments services in South Africa require you to link a credit or debit card to an app. Some of these digital wallets, like Google Pay, use NFC technology to connect wirelessly to the merchant’s card machine. You tap your phone near the device to make a payment. These apps usually also support e-commerce.
Other apps like SnapScan and Zapper work with QR codes. You point your smartphone’s camera at a barcode to scan it and make your payment. A few apps like MTN Mobile Money (MoMo) allow users who don’t have bank accounts to pay selected merchants or send money to any cellphone number.
How to keep your money safe
Using a digital wallet or mobile payment app reduces your exposure to threats such as physical loss or theft of cash or compromise of your debit or credit card information. Even so, every user needs to take precautions to ensure their financial data and money remain protected. Here are some tips to make your digital wallet and banking apps more secure:
Use 2FA: Protect apps containing financial data or payments functionality with two-factor authentication. This means requiring both a password and a second piece of information. This code by a PIN texted to your phone or a number generated by an authenticator app.
Go for virtual cards: Most South African banks these days support ‘virtual cards’. You can usually generate a virtual card on your banking app, then add it to your digital wallet. A virtual card has a dynamic CVV which changes regularly, making it hard for anyone to steal your info. If your virtual card is stolen, it is easy to cancel it and get a new one issued.
Track your statements: Keep an eye on transactions on your banking app. Report any unusual charges to your card issuer, even if they are small.
Always lock your phone: Create a strong password or passcode, and make sure your phone is always locked when you are not using it. Use fingerprint or facial recognition for an added layer of protection.
Be cautious with links: Avoid clicking on suspicious links in emails or messages that claim to be from your bank or payment service.
