Middle-class South Africa is ditching streaming for AI

Subscriptions to AI tools are taking a growing share of consumer wallets, according to a new report by Discovery and Visa.

Speaking at the launch of the Discovery SpendTrend 2026 report in Johannesburg on Tuesday, Lineshree Moodley, country head for Visa South Africa, said AI subscriptions nearly doubled in 2025, with 43% of Discovery Bank Visa clients in the analysis paying for an AI subscription.

“AI subscriptions are growing rapidly in South Africa, with payment volume up 125% and share of total subscriptions payments doubling in 2025. This signals a shift towards more functional, value-driven entertainment services. Consumers are shifting from passively accumulating subscriptions to actively managing them,” the report said.

SpendTrend is an annual report combining spend data from Visa with Discovery’s analytical expertise. The 2026 edition focuses on consumer behaviour in 2025, with comparisons drawn back to 2021. Discovery Bank clients who pay with Visa sit in the upper middle class of South Africa’s population, meaning the data skews towards higher-income earners.

ChatGPT is the most popular paid-for AI tool among those surveyed, used by 67% of respondents who pay for an AI tool. Google’s Gemini came second at 35% and Microsoft’s Copilot third at 27%. Respondents could select more than one tool, so the totals exceed 100%.

Household shopping is one of the most prominent use cases. According to the report, 40% of South Africans in the sample use AI tools weekly or more to make purchasing decisions. Data from Euromonitor, also cited in the report, shows that 3.5% of global online store referrals came via AI in 2025.

AI-assisting buying

Of consumers who use AI for shopping, 61% use it for price comparison, 53% for product research and 47% for finding deals. Among those who made AI-assisted purchasing decisions in the past 12 months, 42% used the technology to choose a cheaper alternative, 35% to switch brands or retailers and 35% to avoid risky purchases or potential scams.

“Consumer spending, more and more, is AI driven. It is more prevalent in younger age groups, with 50% of AI adoption being among 18- to 30-year-olds. Shoppers are also using AI to avoid fraud and risky purchases,” said Discovery Bank CEO Hylton Kallner.

Read: Discovery goes all-in on AI

Kallner said Discovery Bank is also using AI in its back end to reduce fraud. “We have seen an 85% reduction in fraud in using AI at a per-purchase level,” he added.

As AI subscriptions have taken a larger proportion of wallet spend, other categories such as streaming and sports bookings have seen their share decline. Streaming’s share of subscription wallet fell from 67% in 2023 to 34% in 2024 and to just 11% in 2025 – a relative decline in share, not necessarily an absolute drop in streaming spend.

The way South Africans manage subscriptions is also changing. In prior years a binary subscribed-or-not paradigm dominated, which sometimes led to unused services being paid for passively. In 2025, active management became the norm, with users pausing and resuming services based on timing and value. Essential services recover quickly, while entertainment services are used more flexibly, the report said.

Streaming and online media had return rates of around 34%, with between 13% and 30% of users returning after four to six months – “reflecting more discretionary use”, the report said. Food and grocery subscriptions showed the most resilience: 48% of users who paused them returned, and of those, 79% resumed within two to three months.

Read: Discovery Bank CEO Hylton Kallner on the future of banking in South Africa

Among those who switched, paused or stopped a subscription in the past 12 months, 46% said they keep subscriptions only while specific content or features are available, 39% cited price increases and 27% pointed to general budget pressure.

According to Visa’s Moodley, AI subscriptions are expected to grow further as agentic AI tools reach the mass market.  – (c) 2026 NewsCentral Media