The rate of conversion from cash to digital in the FNB ecosystem is accelerating, the bank said on Tuesday.
According to First National Bank, digital payments have surged 360% in the last three years across all banking clients. In the bank’s personal banking segment (customers earning less than R700 000/year), the cash to digital ratio improved by 87% in the past year.
Wandile Mnguni, head of transactional banking products and payments for business and commercial banking at FNB South Africa, said consumers are the drivers of digital payments because their preference for new payment methods such as QR codes and mobile tap-to-pay forces merchants to adapt to their needs.
“We have seen over time that cash has remained relevant in South Africa’s ecosystem specifically because there are some segments that are not financially included,” Mnguni said at a press event in Johannesburg on Tuesday.
“But we are seeing that customers are driving adoption because merchants lose out on a sale when they cannot accept the payment method the customer prefers, so they end up upgrading their technology, so they are prepared for that customer the next time arrive.”
FNB tracks the ratio of card to cash payments of its customers. Customers in the bank’s lowest segment – those earning less than R3 000/month – have the highest preference for cash, while its wealthiest segment (over R700 000/year) is the most digitised. Still, in the past year the cash to card ratio of all customers earning less than R700 000/year has improved from 64% to 73%.
eBucks
According to Daniel Kaan, CEO of core banking and merchant services at FNB, almost 90% of payments in its personal segment are now digital. This can be attributed, he said, to the incentives the bank provides customers for using digital payment methods instead of cash, including the eBucks rewards programme.
Although customers are seen as the main driver of digital payment uptake, merchants play a significant role in driving adoption, too.
FNB also has incentives that encourage business owners to digitise their businesses, including the eBucks business rewards programme.
Merchants also benefit from value-added business tools and services such as free point-of-sales and inventory management software solutions. Access to financing is also easier for digitised businesses because the payment data processed by the business is used to make lending decisions by the bank.
“Our distinct platform strategy and digital value propositions are out-competing cash, with a significant number of transactions across our segments now digital – largely driven by contactless payments,” said Kaan. – © 2024 NewsCentral Media
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