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Digital Payments in South Africa and Using them Safely

Digital Payments in South Africa and how to use them safely

With the Fourth Industrial Revolution upon us, we are moving closer and closer to becoming cashless societies. The advancement in technology with how we transact and pay for goods and services is rapidly evolving. Digital payments in South Africa and around the world are being adopted rapidly and not many people carry cash around with them anymore. I keep thinking about what that means for the man on the street, but I digress…

Common digital payments currently in South Africa

Today, for most people in First World and Middle-Income Countries, the preferred method of payment is some sort of electronic payment mechanism for convenience, improved user experience and safety reasons.

Companies are adopting new technologies at a rapid rate and are becoming more and more innovative with how they process customer payments. Some of the new forms of digital payments in South Africa include things like QR codes, you know, the funny looking barcode on the bottom of your bill. When making this type of payment you simply whip out your phone, open your payment app, like SnapScan, scan the code and, voila! Payment accepted.

The most common form of digital payment in South Africa that we have become used to is probably your bank card that allows you to simply tap your card on ‘The Machine’. As a word of caution, you should keep your bank cards in a RFID (radio-frequency-identification) safe wallet. This type of wallet protects your card from being randomly scanned through your pants or coat pocket by opportunistic criminals.

Digital Payments in South Africa
Make sure your wallet is RFID safe

Bank cards are becoming a thing of the past

Although for now you need to keep your bank cards safe, they are also rapidly becoming a thing of the past. Banks are now beginning to offer digital cards that you can carry on your smartphone. There will soon no longer be a need to carry your bank cards with you on a night out with the family.

Digital bank cards will be available on your smartphone

Other digital payments in development

1. Contactless payments

The latest global digital payment trends are slowly making their way into South Africa. A contactless payment is almost like tapping your card without needing your card. Huh? You can simply use your phone, or smart watch, to pay for your goods and services. You can load your card details onto your device and when you need to pay you simply wave your phone or watch near the terminal and using NFC (Near Field Communication) your device will successfully make the payment.

This form of technology is still in the early testing days for most banks accepting digital payments in South Africa, but many banks have expressed their interest in adopting these payment options as soon as they are available to better service their clients.

Men, just think, you would only need to carry your phone, car keys, reading glasses, sunglasses, house keys and face mask. Ah yes, one less item to remember before heading out the door.

2. Biometric authentication:

Biometric authentication is a verification method which involves biological and structural characteristics of a person. These verification methods include fingerprint scanning, facial recognition, iris recognition, heartbeat analysis, and vein mapping.

Biometric scanning will really go a long way to curb the massive problem of identity theft in South Africa and make payments efficient and safe. You may have noticed your online banking app asking you to set up biometric identification on your mobile phone.

3. EMV (Europay, Mastercard, Visa)

Traditionally, bank accounts were recognised by a unique code of numbers that were static. EMV uses codes that are unique for each transaction. The numbers vary from transaction to transaction thereby scrambling the numbers, which drastically improves security. If a hacker cannot get a hold of what a number is before it changes they will find it very difficult to get into your bank account and steal your funds.

4. Smart Speaker Systems

Smart-home systems like Alexa allow you to give voice commands and receive a verbal response to that command. You can give commands like to turn on your favourite music or switch the lights off when you go to bed at night.

It is also possible to order goods and services and make the payments through smart speakers like for an Uber ride. There are still many security and privacy concerns and the adoption has been slow as a result. However tech-companies like Google, Amazon and  Apple are in a race to develop this technology into safe-to-use devices that will make transactions secure and efficient.

Biometric authentication
Biometric authentication, very cool.

What about my other cards, will they go digital?

These are just a few of the current and developing digital payments that will become available in South Africa in the near future. But what about things like my driver’s license, my 50 loyalty cards and my gym card? I need to be able to keep those somewhere too. The good news is that there are trends emerging where these services are also becoming digital in South Africa. Your loyalty cards will be on your smartphone, like the Checkers, Pick ‘n Pay and Woolworths loyalty card. There is no reason why the rest won’t follow suit. What a pleasure!