June 26, 2024

Exploring alternative ways to pay – the future of transactions

Staying ahead of the curve is crucial for merchants in the rapidly evolving fintech landscape. Lood du Plessis, Technical Product Manager at adumo, explains how its integrated payment solutions are designed to support emerging payment methods, empowering merchants to embrace different ways to pay.

The changing landscape of payments in Southern Africa

The payments landscape in Southern Africa is undergoing significant transformation. Beyond the traditional debit and credit card payments, there is a growing prevalence of alternative payment methods.

Alternative payments can be broadly categorised into two groups: those linked to a bank account and those independent of bank accounts. The delivery mechanisms of these may also vary from QR codes, short codes, unique IDs and even cellphone numbers. This ultimately allows a consumer to choose the most convenient way of making a payment, while the merchant may also benefit from low-cost mechanisms to conclude the transaction.

One of the most significant shifts in the payment landscape is the rise of person-to-person (P2P) payments. In South Africa, platforms like e-wallets or cash-to-phone have become synonymous with this form of payment, enabling users to send money to a registered cellphone number for transfer or withdrawal. “These have set a precedent in P2P payments, enabling bank-to-unbanked transactions through tokenisation,” explains du Plessis.

According to the 4Sight Digital Banking Behaviour Survey, over 60% of South Africans prefer using digital wallets instead of carrying physical wallets. Discovery Bank’s SpendTrend24 report, in collaboration with Visa, found that mobile phone payments are on the rise, with spending via digital wallets like Apple Pay increasing by 9% in 2023 compared to 2022.

Looking ahead, person-to-business (P2B) wallet payments are poised to revolutionise the market. “This is where we see payments going over time. Our focus is to proactively integrate these alternative ways to pay to ensure that our merchants stay at the forefront of the payment revolution,” says du Plessis.

The future of digital payments

Launched in March 2023, PayShap is quickly becoming a game-changer in the South African payments landscape. “It is experiencing rapid growth, from 250 000 transactions in May 2023 to an impressive 30 million transactions in just a year,” notes du Plessis. This platform enables P2P payments using a PayShap ID linked to the consumer’s cellphone number, facilitating immediate payment and low-cost transactions.

The next phase is to enable P2B payments, referred to as request-to-pay (RTP), allowing merchants to accept payment via PayShap. “This will be a significant development, reducing transaction fees, enhancing the adoption of digital payments and reducing the use of cash for payments” says du Plessis.

Retail enablement of alternative payments

For many years, card payments have dominated the electronic payment landscape when making payment to a merchant. This started with magstripe cards, transitioned to chip cards, and evolved into NFC contactless cards. Today, payments are increasingly being made using NFC-enabled mobile payment solutions like Apple Pay, Google Pay, and others. These modern methods provide quick, secure transactions, enhancing the consumer experience and minimising queue times in retail environments.

QR code payments are increasingly gaining traction as a convenient and secure payment option. “We see QR codes as a viable alternative to traditional card payments, providing a secure and efficient way for consumers to transact,” notes du Plessis.

Typically linked to digital wallets connected to traditional bank accounts, QR payments require the use of a smartphone. This dependency, however, excludes some consumers from utilising this method. Therefore, the ability to capture a cellphone number, voucher, or virtual card number in the merchant environment remains essential to ensure all consumers can be serviced.

A commitment to innovation

adumo is dedicated to providing merchants with a comprehensive suite of payment options at all times, ensuring that consumers can pay using their preferred payment methods 24/7. The company is particularly focused on the wallet market, recognising its potential to drive the adoption of digital payments in Africa.

While the shift towards digital money is inevitable, it requires a concerted effort from both technology providers and regulatory bodies. adumo is at the forefront of this transition, ensuring that its payment solutions are secure, compliant, and adaptable to future developments. “Our aim is to make digital banking accessible to the mass population, reducing reliance on cash and enabling safer, more efficient transactions,” says du Plessis.

As the world moves towards a less cash-heavy society, adumo’s innovative payment solutions will play a crucial role in shaping the future of commerce in Southern Africa. With a focus on security, affordability, and convenience, adumo is empowering merchants to navigate the evolving payments landscape with confidence.

Discover the benefits of adumo’s innovative solutions today: https://www.adumo.com


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