Standard Bank: Consumers gravitate towards digital
Johannesburg - Consumers shied away from cash and gravitated towards digital payment solutions during the national lockdown, according to statistics from Standard Bank’s Card Division.
In March 2020, the South African Government implemented a nationwide lockdown to slow the spread of the COVID-19 virus. Under the circumstances, South African consumers needed to find new, safer ways to shop. Since then, Standard Bank says that its customers have done 20% of all their credit card transactions online. If they had to leave home to shop, 17% of their in-store credit card transactions were contactless payments using a mobile device or tap-to-pay.
"We witnessed a dramatic shift in behaviour around payments during the lockdown period. With concerns over Covid-19, consumers opted to make payments via Internet Banking and our Mobile App, or by using the tap-to-pay functionality," explains Ethel Nyembe, Head of Card and Payments at Standard Bank.
Standard Bank stated that its data also showed that there was an 84% increase in the value of online spend at supermarkets and grocery stores year-on-year while spending at online general merchandise stores increased by 458%. Not surprisingly, the online purchasing of airline tickets decreased by 74%. Similarly, contactless spend increased by 608% at petrol stations, 179% at wholesalers, and 137% at supermarkets and grocery stores.
Nyembe says, “Right from the start of the pandemic in South Africa we encouraged our customers to adopt our digital banking solutions. As a result of this and the necessity to change their behaviour because of changing living circumstances, we saw an increase in digital adoption. Many consumers now trust digital payment solutions, and we will continue to use them moving forward.”
The blue bank says that it saw a further increase in the use of its virtual cards, which can be accessed and set up via the Mobile App. It says clients can select from a range of digital cards to make purchases online with popular e-tailers without having to expose their credit or debit card details. The cards offer the ability to top up for online purchases or physical cash withdrawal giving our customers peace-of-mind that they will not over-spend on the card.
“The rate of adoption is encouraging and demonstrates the evolving consumer need for digital solutions to transact. Enabling fast, frictionless and safe payments is key, especially in the current environment where there is a reluctance to deal with cash,” Nyembe says.
Acquisitions of mirror payment trends:
From an acquisition standpoint, the trends mirror consumer behaviour. Retailers that experienced a boom in online purchases over the six months include bookstores who were up 292%, and clothing and accessory stores who were up 103%. There was also a 56% increase in the percentage of charitable donations made. Online spend on universities and colleges was, however, down by 14% compared to last year.
Point of sale spends increased by 30% at grocery stores and supermarkets, 25% at hardware stores, 30% at the computer and electrical stores, and 34% at nurseries and florists.
Spending was down 7% at barbers and hair salons, 42% at watch and jewellery stores, 10% at clothing and accessories and 79% on local travel, including airlines hotels, car rentals and travel agencies.
In line with the upswing of digital adoption, there was a 15% decrease in the total value of cash transactions over the lockdown period. Again, digital solutions enjoyed significant growth over the period with the total value of SnapScan spend up 15% since the start of lockdown, Instant Money was up 6% and the spend on MasterPass was up 30%.
And, according to Nyembe, the benefits of contactless solutions extend beyond health and safety. “Contactless payments offer a secure way to purchase goods and services. Further to that, businesses that adopt these methods can access a wider customer base as it enables them to accept payments from anywhere else in the world. The shift to serving customers through an online or mobile banking model has demonstrated the potential of innovative digital technology.”
However, vishing is a growing concern and becomes more common with the increase in mobile banking. A vishing scam is where fraudsters impersonate a bank’s official or service provider and ask customers to provide their OTPs, usually telephonically. These scams are becoming increasingly sophisticated, with fraudsters able to steer victims into disclosing confidential information, while under the impression that they are speaking to the bank official or service provider. It is important for customers to know that the bank will never ask for their account details, password, PIN or OTP over the phone. If you get a call, and are asked for these, do not share your details. Protect yourself, and:
- Make sure it’s authentic: Banks don't use e-mail communication to ask for your personal information because e-mail is not secure.
- Step into the future: Rapid digitisation of banking services, combined with the need to protect consumers from fraud and identity theft, have created a need for biometric identification technology to become an integral part of banking security systems.
- Keep it private: Keep your PINs and passwords private, at no point should you be sharing your information with anyone.
- Make your updates: Your service providers are constantly trying to improve their security systems, so make sure to upgrade yours.
Nyembe, however, warned that it is critical for the bank to be one step ahead in the race to provide safe and secure digital banking solutions for its customers especially with the upcoming Black Friday and Festive Season sales. This will mean implementing systems and controls that keep up with the evolution of customer preferences and cyber risks.
Since COVID-19 will be with us for the foreseeable future and a heightened awareness of hygiene to remain long after, we should be seeing a more sustainable and permanent shift away from cash towards the safety of contactless payment solutions, she concluded.