The Ukeshe card in Action. Picture: Supplied
The Ukeshe card in Action. Picture: Supplied

SA lags behind in cashless revolution

By Mwangi Githahu Time of article published Apr 8, 2020

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Cape Town - The World Health Organisation has said there is a likelihood that cash may spread the coronavirus and in order to help combat the spread South African banks are turning to cashless transactions.

Mobile money transfers, online, debit and credit card transactions are being encouraged as opposed to cash.

However, even as cashless transactions increase, the unbanked population remains a concern. Of South Africa’s population of 59 million, 11 million people are described as unbanked or under-banked.

Clayton Hayward, co-founder of micro-transaction platform uKheshe, said: “A move to a cashless environment is now possible for all South Africans regardless of income levels or banking status.”

Launched last year, uKheshe provides e-money services and is the only micro-transaction platform to align with the SA Reserve Bank’s requirements set out in 2009.

Its partnership with Nedbank and Mastercard in South Africa has enabled the platform to provide a diverse range of e-money services.

Hayward said: “While the initial intent was to address the 11 million unbanked or under-banked, cashless transactions have gained momentum in light of the unprecedented global health crisis. Cash is a possible contaminant, making a cashless environment a preferred and safer option.”

James Williams, the head of marketing at short-term loan provider Wonga, said: “While the ease and convenience of the digital age are essential to promote financial inclusion, in a South African context there are significant barriers. Access to the internet and mobile data remains low, many people are still unbanked, and there is a lack of trust in the formal financial sector.”

Kumar Utpal, regional sales manager at In2IT technologies, which works with banks and financial institutions, said: “Due to this pandemic, digital transformation and adoption levels have been very quick and I predict that post the pandemic there will be more adoption of online shopping and home deliveries and a boom in micro-payment apps.”

Visa Spokesperson Aldo Laubscher said: “Financial inclusion is a simple idea: but not easy. Today, about half the adult world lives in the informal economy, dealing exclusively in cash. To be one of these estimated two billion people is to face financial barriers that make life risky, expensive and inefficient.”

Laubscher said: “Visa partners with several government agencies in South Africa to extend financial inclusion. Working with the South African Post Office, Visa is supporting the South African Government to disburse social grants to 8 million beneficiaries of the South African Social Security Agency (Sassa) on a monthly basis via a Visa-branded card since 2018.”

As for creating a cashless society, Chief Sales Officer at Direct Payment Online SA (DPO South Africa) Brendon Williamson said: “I have always said if you want to remove cash out the market, you need to take it away. Consumers will continue to use the simplest method that they have access to and which they trust. It may take something like Covid-19 for us to realise that we can do business without cash and that there are alternate solutions.”

“Adversity creates opportunity and new methods of transacting will be born from this. One thing for sure is that we definitely will see a bigger drive towards digital payments. What will need to happen is for regulation and traditional banking to quickly adapt to this new world,” said Williamson.


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Cape Argus

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