What consumers and merchants need and expect

If industry wants a digital economy, understanding the driving motivators and needs behind merchants is increasingly important.


There has been a greater shift towards people gaining access to financial services and becoming formally banked. However, 80% of transactions below R3 000 still occur in cash. Cash is instant, accepted everywhere and has no hidden costs. For digital payments to become a compelling replacement for cash, it needs to outshine the properties of cash.

There is one aspect where cash falls short: safety and security.

It is here where digital payments become more favourable to consumers who may prefer digital payment methods like card or EFT. Carrying cash makes consumers feel unsafe, and targets of crime.

Most frustration for consumers considering digital payment methods comes from fees, and transparency behind them.

Most consumers feel that the information around transaction fees is hidden and expensive, leading to mistrusted banks and the perception that financial institutions do not have their best interests at heart.


If de-cashing the ecosystem is to be addressed effectively, the types and variety of merchants dictating payment methods need to be clearly understood, particularly within the informal sector.

There are varying degrees of formal and informal traders. Informal traders are the drivers in keeping the cash ecosystem alive because there is a perception that their small businesses do not warrant a bank account at the risk of bank fees and tax obligations, among others.

After surveying a group of formal merchants, we found that their number one priority was minimising costs in the form of fees per transaction on POS devices, closely followed by customer experience and reliability. It is obvious that any merchant is cognizant of costs eating away at their profits.

Lowering fees or making them nearly invisible, is the most attractive value proposition to merchants.

As a bold idea, no fees on transactions in the short-term might yield better results in the longer-term pursuit of de-cashing the ecosystem and circulating more money via the digital ecosystem.

What will it take to successfully digitise the economy?

In our newest publication we explore what the future of payments looks like for South Africa. What can smart phones offer to accelerate the adoption of digital payments? What can we learn from global markets? And what does industry need to succeed in digitising the economy?

Read more by downloading the publication below.