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Growth In Cashless Transactions Spurs New And Innovative Payment Solutions

Last year, exciting developments in South Africa’s payments sector were good reason to be cautiously optimistic about 2023 with new products and services setting the pace of the journey to a digital cashless future, says Andrew Springate, CEO of fintech payment solution provider PAYM8.

“The South African economy is under tremendous pressure with rising interest rates, high energy and fuel costs and debilitating power outages. Despite this, increased competition amongst financial services providers can play a significant part in supporting the country’s overall economic growth.” Springate says PAYM8 has been at the forefront of the continuous reinvention of the payment industry which includes the stabilisation of the Authenticated Solutions (Debicheck) in South Africa and the Enhanced Debt Orders (ENDO) in Namibia.

Future growth

“We are well positioned for future growth with the appointment of Alwyn Fourie as Chief Operating Officer and Petrus Dippenaar as Operations Manager. Taking a broad view, the rollout of the Rapid Payments Program (RPP), as spearheaded by the South African Reserve Bank (SARB) as a proxy payment solution, is a significant development in the payment solution industry.”

The RPP requires South African banks to offer a simpler, more cost-effective real-time payment functionality as a viable alternative to cash payments. BankservAfrica anticipates that Rapid Payments will become the preferred e-payment option in South Africa following its launch. “Rapid Payments will almost certainly be a ground-breaking trend. Proxy payments are convenient, safer, and much more intuitive to use than the alternatives. It is more accessible for people who would otherwise be resistant to digital payments. Proxies also enable further payment innovation to fuel continued growth of the digital economy in South Africa and across the continent.”

PAYM8’s own Payments-Platform-as-a-Service (PPaas) offers access to all payment product requirements for collections, digital commerce, mobile payments, and card transactions. “As a standalone intelligent platform, Axis is secure, with a single view of payment transaction aimed at both existing merchants as well as third-party businesses wanting to use an intelligent payments platform to gain unparalleled greater control over the payments journey and provides unencumbered access to payment products and services.”

As more businesses look to weave payments into their digital offering, payments are rightly being prioritised as a growth catalyst. “As a result, a number of the core problems to be solved in payments are highly technical in nature. They include tasks such as integrating new payment methods and harnessing machine learning to improve authorisation rates. With artificial intelligence (AI) and machine-to-machine learning (M2M) data structures already in place within the Axis platform, it ticks all the boxes for businesses.”

Springate says PAYM8’s value proposition addresses many of the issues facing small and medium-sized merchants. “The technical complexity of some solutions are often not scaled enough to justify the cost for smaller businesses. We help them to unclutter their payment solutions.”

Cashless payment volumes

According to the PwC Payments 2025 & Beyond report, global cashless payment volumes are set to increase by more than 80% from 2020 to 2025, from about one trillion transactions to almost 1.9 trillion, and to almost triple by 2030.

As banks embrace digital transformation broader consumer adoption will follow, which will naturally lead to an increase in online sales. “Once this happens, marketplaces will grow exponentially and will expand to include the free flow of cross-border trade within the continent. The uptake in digital payments, enhanced collection solutions, cross-border collaboration and new payment products will allow for much-needed economic growth in the short to medium term. African economies need innovative payment mechanisms that promote entrepreneurship while accelerating financial inclusion for those who need it most,” notes Springate.

Some macro trends in payment solutions

  • Digital wallets are the norm – Apple Pay and other digital wallet options are now a common fixture alongside other traditional payment options at the checkout counter.
  • More buy now, pay later (BNPL) companies. Financial uncertainty during the pandemic led to an influx of applications that allowed consumers to spread payments out across monthly instalments.
  • QR codes are commonplace. QR codes came back with a vengeance when brands and venues were trying to limit the amount of cross-contamination through money, tickets, and receipts.