The Cashless Economy
The Cashless Economy

Benjamin Powell, CEO at Dashpay unpacks the cashless payment trends post-Covid

The need for digitising payments is far from a new undertaking, however Covid-19 highlighted the need for South African businesses to do more to ensure they are operating in a cashless society. As demand rose for contactless - tap and pay -payment methods so too did the innovation that made this possible.

During my 20 years of working in the payment technology sector I have never seen so much innovation in such a short space of time fuelled by the pandemic. In South Africa much has been achieved for the local market. Importantly we’ve learned that electronic payments need to offer similar benefits as those afforded to consumers who prefer cash. This is especially important in a country where cash still dominates the informal sector. There is a lot of market potential in the un-tapped and un-banked small business community.

For the more digital-savvy consumer, flexibility and different payment options matter. And what’s important is the ability to execute payments in seconds. These consumers will thrive in the future digital economy. A recent Deloitte study1 reported that there are several mechanisms already in place to enable this and banks, card companies, fintechs and retailers are all involved in rolling out digital, contactless payment mechanisms. In the report they add, while most South Africans do have a bank account and payment card (80%), there is still a very high reliance on cash. The report adds that approximately 90% of shops in the informal sector run entirely on cash, despite interest from their customer base to pay with their card.

QR Codes are here to stay

The study reported an increased uptake by both large and small retailers of the QR code, which uses an app on your mobile phone to scan a QR code at the merchant. A very convenient way to pay as it takes away the physical contact required to make a payment. More and more, consumers are choosing to tap or scan rather than punch their pin into a keypad for smaller value payments. QR payments are widely used in China and probably more prevalent than card-form although these payments in many cases still use the card rails for authorisation and settlement. Dynamic and static QR codes allow merchants to accept payments without the need for a dedicated POS (point of sale) device as long as the consumer has an application to use the QR code, like Zapper, Snapscan or Masterpass.

In the UK, Amazon has opened its first “just walk out” grocery store where shoppers simply select their goods and leave without having to visit a till. Through the retailers App the shopping bill is automatically charged to the consumers Amazon account when they leave the store. While this completely contactless system has many advantages, in South Africa tellers are a vital part of the employment chain. It’s therefore doubtful that this specific solution will be adopted in South Africa, but many other innovations are improving customer experiences in retail payments. These include Apple Pay (recently launched in South Africa) and Samsung Pay which enables consumers to embed their card credentials in their phone and transmit it to the POS device through the NFC (near-field communication) chip in the phone. These innovations change the form factor of the card and allow for PIN entry on your phone rather than the traditional POS device.

Predictably global economies are in various stages of development and locally the accelerated move towards a digital economy is a positive, seismic shift. Traditional financial institutions and financial services companies, often constrained by legacy systems and platforms, have for various reasons struggled to respond to changing customer needs. They too have failed to provide innovative payment related services to non-traditional merchants, be they retailers, wholesalers, other independent vendors, and more particularly SMMEs. This is where Dashpay's technology platforms are the solution. Both adaptable and compatible with point of sales devices, they offer state of the art switching and processing capabilities. Dashpay has the capability to develop bespoke solutions for merchants or groups of merchants that want to offer more functionality and acceptance capability on their traditional bank POS devices.

Dashpay was initially conceived as a traditional merchant acquirer or Aggregator when first established in 2013. Since then, a significant amount has been invested in the development of systems and technology, with further resources being allocated to complete a multi-product transacting platform, essentially for the facilitation of Business-to-Business payment related products in conjunction with its institutional client base.

Despite the macro-economic headwinds and low consumer confidence, it has been exciting times for us at Dashpay; during our past financial year, we executed transactions exceeding R4.9 billion in annualised gross transaction value. We are focused on continuing to improve our transacting capability and we’re upgrading our infrastructure to build true digital capacity for the future.



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