PayFast, a Cape Town-based online processing service, reported an increase of 412% in transactions made via Masterpass between March 2020to February 2021. This indicates clearly, the pandemic's impact on the country's eCommerce sector and how digital payments have become a popular mechanism for both businesses and consumers.
The Managing Director and Founder of PayFast, Jonathan Smit, explained that digital payments are on the rise.
According to him, “Our data indicates that the appetite for businesses to move online hasn’t slowed down. Digital payments are increasingly becoming the standard for retail in our current climate, with almost seven million users on our payment engine over the past 12 months.”
PayFast said it processed an 83% increase in total payment volumes and registered over 40000 new merchant accounts since the start of lockdown last year. These figures are noted in comparison to the same period in 2019.
PayFast’s research has indicated that several industries including; online alcohol sales, bakeries with home delivery services, and eCommerce stores catering for pet supplies and jewelry, have grown overall by 1000 – 3000%.
“This is based on the number of transactions from new merchants who signed up and started transacting for the first time over the lockdown period, compared to the previous year,” explains PayFast.
The growth of these industries can be attributed to direct online sales to consumers. Cutting out the middle man of wholesalers in the transaction chain for these businesses increased their sales and overall profit, with many adopting the digital contactless payment system.
Overall findings by PayFast have reported that the top growing industries include the food and baby sectors.
Smit commented, “Considering the growth we recorded last year, we are confident that we will continue to see the digitisation of payments across various industries including retail, professional services, and eCommerce.”
The online payments system has reported a 143% increase in mobile payments as consumers opt to utilise their smartphones to shop online.
“We’re seeing an increase in mobile payments processed through our payment engine across multiple payment methods including digital wallets that scan QR codes, Instant EFT, and card payments,” added Smit.
South Africa in Focus:
Population: 59.6 million (2019)
GDP: $369.85 billion (2019)
GDP Per Capita: $6,193 (2019)