South Africa’s card payments market is forecast to grow by 11.4% in 2024 to reach ZAR2.3trn ($125bn), supported by a constant consumer shift towards non-cash payments, according to GlobalData, publishers of EPI.
GlobalData’s Payment Cards Analytics reveals that card payment value in South Africa registered a growth of 13.4% in 2023, driven by a rise in consumer spending.
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Siddharth Das, Banking and Payments Analyst at GlobalData, commented: “South Africa remains a cash-driven society, with consumers preferring to use cash for day-to-day transactions. However, the country’s payments market is steadily shifting towards electronic payments, driven by the combined efforts of the government and financial institutions.”
The central bank’s “Vision 2025” strategy includes several initiatives aimed at promoting financial literacy, with expanding the country’s payment infrastructure to support low-cost digital payments one of the key initiatives.
The growing acceptance of payment cards by retailers and a rise in contactless payments is steering the transition towards card payments
South Africa is steadily transitioning towards becoming a less cash-centric economy, backed by government initiatives promoting electronic payment methods. The transition from cash to cards is evident in the expanding number of POS terminals, which rose from 424,873 in 2020 to 531,387 in 2024.
Debit cards account for 70.7% of the total the card payment value in 2024. The preference for debit cards can be attributed to several factors, including growing banked population and the availability of basic bank accounts for low-income segments and the National Development Plan of 2012, which aimed to achieve a 90% banked population by 2030, a target that appears likely to be achieved or even surpassed. Debit card payment frequency stands at 89.2 in 2024, up from 61.8 in 2020.
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By GlobalDataOn the other hand, credit and charge cards account for only 29.3% of the total card payment value in 2024. However, banks in the country are offering various value-added benefits to increase the use of credit cards, such as rewards, discounts, and cashback.
Das concludes: “South Africa’s payment card market is expected to continue its upward growth trajectory, supported by improving payment infrastructure and rise in consumer spending coupled with government constant push for digital payments. The market is expected to grow at a compound annual growth rate of 9.3% between 2024 and 2028 to reach ZAR3.3trn ($178.4bn) in 2028.”
