In a country where 10.5 million people receive their SASSA grants via a cashless system and 70% of the population have accounts at financial institutions, is cash here to stay, asks CHAD FICHARDT, independent tech and finance communications specialist.
The way the world transacts is in transition. Physical cash and cards are morphing into a hybrid of mobile, digital and perhaps even crypto. This brings to the fore exciting commercial opportunity and challenge. Mostly, it offers the chance of financial inclusion.
At the recent Cashless Payments Summit, experts attempted to decipher where this transition is headed and what it means for South Africans.
The idea of going cashless, or replacing cash with digital money – largely enabled through seamless payment on our mobile devices – is being propelled into reality by governments and corporations who see the benefits.
In developed markets mobile payments are leapfrogging card and are well on their way to replacing cash. Singapore, the Netherlands, Sweden and France see almost 60% cashless transactions, according to figures from Mastercard.
The Central Bank of Nigeria is starting to drive ‘cashless’ because it sees the economic benefit. “Going cashless inevitably means you know more about your customers and trade starts to increase. Additionally, where relevant, the more you know about your customer the more you are willing to lend money, which, when done responsibly, leads to further capital available for them to invest and for the economy to grow,” says Anton Gaylard from Crossfin, a local technology investment company.
Cashless transactions are traceable and the amount of information available relating to a particular transaction gives rise to more opportunies for data management and personalisation. In the US, retailers are seeing a 10% uptake in sales from knowing your customer better.
According to Karen Nadasen, PayU South Africa CEO, getting cashless right will enable other trends, particularly in and around eCommerce. “eCommerce is often a barometer for how payment technology is progressing. It gives you an idea of where trust levels are at. As we see eCommerce steadily grow and give rise to better data collection and usage, we see richer opportunities to solve real problems like financial exclusion,” says Nadasen.
However, cash still prevails at the low end of the market. Commenting on the ‘stickiness’ of physical cash, the Centre for Financial Regulation and Inclusion’s Barry Cooper, observes that encashment, or the ability to access cash from other forms of money, will drive digital money uptake.
“You actually need more cash to take the step into digital. The current digital ecosystem is concentrated around economically active areas only and cash reticulation (the development of an accessible network) remains limited. Whereas cash is perceived to be free and universal. This leads to a disproportionate gravity towards the cash economy,” says Cooper.
It is evident that access to platforms, improved convenience and trust hold the key. From a technology provider perspective it’s all about driving the costs down. Interestingly, Cooper points out that the informal digital environment is sophisticated, more trusted than banks in informal markets and highly effective. Increasing trust in digital channels relies heavily on the reliability of the technology and the points of interaction with the real economy. This is something the informal market is getting right, according to Cooper.
At the other end of the spectrum, cashless technology is speeding things up at the point of sale for retailers. Speed through the checkout affects the bottom line directly, not to mention the added benefit of less queuing time and happier customers.
NFC technology, which allows you to tap your card for payment, has halved the time it takes to complete a traditional card payment in retail and reduced by a third the time it takes to do a traditional cash payment.
With mobile payments increasing at 23% year on year in South Africa, all eyes will be on eCommerce. “There is so much progress being made in the fintech and, to a lesser degree, eCommerce space at the moment that all point to a further penetration into cashless,” adds Nadasen. “Payment technology is going to have to move further in the background, or frictionless for mass uptake of cashless to be realised.”
It is peculiar that in a country where 10.5 million people receive their SASSA grants via a cashless system and roughly 70% of the population have accounts at financial institutions, that cash appears to be here to stay, for now.
Win a Poster Heater with Gadget and Takealot.com
This winter Gadget and Takealot.com are giving away three Poster Heaters, which look like posters but become heaters when you plug them in.
Three Gadget readers will each win a unit, valued at R550 each. To enter, follow @GadgetZA and @Takealot on Twitter and tell us on the @GadgetZA account how many Watts the heater consumes.
What’s the big deal about these heaters? Many of us are struggling to keep the balance between soaring electricity costs and the need to keep warm this winter.
However, the recently launched Poster Heater by EasyHeat and distributed in South Africa by Takealot.com is not only one of the most cost effective electric heaters currently on the market, it is also easy to setup and use.
As the name indicates, it is a poster similar to one you would hang on a wall. But, plug it in and it turns into a 300 Watt heater. The Poster Heater isn’t designed to heat hallways or large rooms, but rather smaller ones like a bedroom or a baby’s nursery or a dressing room.
It uses radiant heating, which means that it heats up in a couple of minutes and the heat is directed at the objects or people around it, quickly taking the chill out of the air and providing a comfortable ambient temperature.
The other advantage of radiant heating is that it doesn’t dry out the air like infrared or gas heaters. Users also don’t have to worry about their children or pets getting too close to it because, even though it gets hot, it can be touched.
To enter the competition follow the steps below:
Competition entry details:
3. The competition closes on 31 July 2018.
4. Winners will be notified via Twitter on 1 August and Takealot.com will be in touch to organise delivery.
5. The competition is only open to South African residents.
Happy Emoji Day! Here’s 10 reasons to be cheerful
First created by Shigetaka Kurita in 1999, the emoji has become a huge part of everyday communication. Whether you love them or hate them, flying dollar bills, applauding hands and rolling eyes are here to stay.
Scientist suggest that the use of emojis will help us gain the same satisfaction from digital interactions as we enjoy from personal contact.
Almost two decades later, and we have over 2600 unique emojis to perfectly express what we feel, thank you Mr Kurita! Join HMD, the home of Nokia phones as we celebrate World Emoji Day on the 17th of July with these interesting emoji facts:
The most popular emoji used is “Person Shrugging”
1. The Nokia 3310 was chosen as one of the first 3 “National” emojis for Finland… it represents unbreakable!
2. South Africa’s favourite emoji is the “Kiss and wink”… how sweet SA!
3. French is the only language where a ‘smiley’ does not top the list for its use
4. On average, over 60 billion emojis are sent on Facebook every day
5. For the first time ever, the Oxford Dictionaries Word of the Year was a pictograph! The “Face with Tears of Joy” was crowned word of the year in 2015
6. According to Emojipedia, some of the most requested emoji’s include afro, a bagel and hands making a heart
7. To include all races, a diversity pack was released in 2017
8. It has become so trendy that the Museum of Modern Art displays the original emoji collection on canvas
9. In 2009, Herman Melville’s classic Moby Dick was completely translated into emoji’s