South Africans are increasingly turning to virtual bank cards for digital transactions to combat the threat of their payment information being compromised and falling into the hands of criminals.

This is according to the SpendTrend2025 report released by Discovery Bank and Visa on Thursday.

The report used a combination of consumer spending data and surveys, which compared spending trends in 2023 to those in 2024. The analysis also adopted a longer-term view of how, when and what customers spent their money on between 2019 and 2024.

“The rise of digital banking has changed how people use money and what they expect from banks, especially as clients blend digital and in-store purchases and use new transaction methods,” said Hylton Kallner, CEO of Discovery Bank. “As cyberthreats rise globally, security is critical and insights from SpendTrend25 confirm consumers are increasingly concerned about digital safety.”

According to the report, 45% of respondents to the survey use virtual cards. The rewards attached to virtual cards are another driver of uptake, said Discovery. Supporting data gathered by Visa shows that fraud incidents are six times lower with digital wallet transactions compared to physical cards.

Consumers are also making frequent use of their banking apps, which can deploy new virtual cards in minutes, even for new accounts. Discovery said this feature is leading to customers making use of virtual cards while they wait for physical cards to be delivered to them.

Online spending

“As fraudsters become more sophisticated at targeting online payments, virtual cards are increasingly being favoured for their enhanced security and control over spend,” said the report.

Coinciding with the growth in virtual card usage is an increase in online spending. But South Africans are not simply swapping out their in-store shopping experience out in favour of online purchases. Instead, 21% of local shoppers are blending both modes of payment.

“Consumers are embracing ‘phygital’ shopping experiences such as ordering products online and picking them up in-store or checking product availability online at nearby stores before purchasing,” said the report.

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The outcome of these changes in consumer behaviour is a decrease in the reliance on cash as real-time digital payments take preference. Some 67% of survey respondents reported using cash a few times in a month or never using it at all. More than 80% of respondents said they opt for card payments whenever they can.

South Africans spend about 70% of their earnings on groceries, retail, travel, eating out and takeout, and fuel. Spending on eating out and takeout grew by 13% year on year for in-person purchases in 2024, with online purchases growing by 10% over the same period.

Discovery Bank’s weekly distribution of total in-store grocery transactions per hour for 2024 shows that shoppers are busiest on Sunday mornings between 11am and midday. Kallner said Discovery has observed a strong correlation between online shopping and healthy purchases, which the bank attributed to the lack of sweet temptations shoppers are exposed in the checkout isles at physical stores.

South Africa’s fuel spend grew by 5% year on year in 2024, compared to a 4% year on year drop in 2023. Kallner said the widespread enactment of return-to-work policies has led to fewer people working from home, which explains the uptick, with Discovery Bank clients spending 6% more than the national average in 2024. As is common in the banking sector, Discovery Bank’s rewards programme gives members more rewards points when they pay for fuel using digital methods.

“As fuel prices have steadied over the past two years, there is less of a rush to refuel on Tuesdays ahead of the Wednesday price hike. The favourite day for Discovery Bank clients to refuel is still the start of the weekend,” said the report.

Despite the rise in digital transactions signifying that consumers have developed more trust in the system, fears over fraud and hacking are at an all-time high. Some 61% of respondents to the Discovery and Visa survey reported that they are more worried about banking security now than they were a year ago, with 63% saying they personally know someone who has been affected by fraud and 76% saying they frequently receive spam e-mail.

“While fraud is a major concern, most people still trust banks to protect their money and data. Eighty-six percent of respondents say fraud protection from their bank is essential, and 80% say they have confidence in their bank’s fraud protection measures,” said the report. – © 2025 NewsCentral Media

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