EFTs and e-wallets make online shopping in Africa easier and accessible
The world is ever-changing and, so is the sector your business operates in. You don’t just need data to keep track of trends that are shaping the economy – you need the expertise to turn that data into valuable insights and sustainable growth opportunities that will unlock your business’ potential.
In the Absa Insights podcast series, The Money Show’s Bruce Whitfield engages in conversation with the bank's chief digital officer about financial ecosystem innovation in South Africa and the continent as a whole, and the exponential growth of digital.
Listen to the audio below:
Africa has become a hotspot for financial ecosystem innovations
South Africa is seeing exponential growth of all things digital. New technology and innovation, such as digital payments platforms are creating an improved and more integrated consumer experience.
Digital payments through e-commerce have taken off on the African continent, even going so far as positioning the continent as a world leader, says Absa's Chief Digital Officer, James Scott.
A lot of those examples were born more out of necessity to facilitate the movement of money versus a pure innovation play.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
But it’s all about integrating the consumer experience, he insists.
He believes South Africa can learn a great deal from global trends. One key area is the regulatory environment, which if managed properly, can unlock innovation.
It could bring in, particularly in South Africa, our financially excluded population by bringing in the technology, innovation and digital payments alongside the shifts we are seeing in regulation.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
Modern telecommunications and digital and mobile commerce growth are key
A key factor lies in increasing activity around mobile commerce, says Scott, and there has already been an explosion of this sector in Africa.
However, he wants to see the space opening to include more people in this technology platform space.
What does the oft-used phrase ‘opening up the ecosystems' mean?
Scott explains that there is a shift from more traditional financial services spaces to alternatives.
These firm physical environments – I want to call them product pipes - that are delivered through to customers in propositions, and the big shift has really been more into horizontal platforms and we could expand that to call them ecosystems.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
He explains that those participants in ecosystems, outside of the consumers, could be third-party digitally-enabled providers.
In financial services, this would include everything from Fintech, to card schemes, digital payment providers to banks and central banks, he elaborates.
It’s really a shift from more direct products to platform spaces.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
Exciting initiatives abound in the South African market around low-cost payment rails
These of course, are not railway tracks from our past, but invisible digital rails that provide the infrastructure for new ways of doing transactions.
Africa has come a long way in the last 20 years. For example, Malawians working in South Africa used to pay exorbitant wire transfer fees to send money home to their family in a rural village in Malawi.
To put it simply, now a mobile phone can send money to another mobile phone in seconds.
Mobile has facilitated a lot of that.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
But there are still some costs involved and so bringing in the newer technologies will make this even easier, quicker, and cheaper.
Providing lower-cost rails, using a distributed leger technology, you can move that money at a fraction of the cost and at significantly faster speeds.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
Throughout Africa we are seeing these payment gateways popping up as retailers take business online, he says, whether that be in the form of EFTs, e-wallets, or any other form of electronic payment system.
The online shopping experience is also constantly getting better.
I think we, in my view, we are going to see some consolidation and improvements in this space.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
Making it a better experience for the consumer is hugely beneficial to the retailer as well says, Scott.
“You’re removing friction from the sales process,” and so generating more sales, a lot quicker and smoother.
He says the kind of analytics that can be run on the data is phenomenal. It also helps increase security and lessen fraud.
Crypto is revolutionising the world of transactions
Improved security is also opening the cryptocurrency space and there is an increasing cross over between these technologies. More and more merchants are accepting crypto, says Scott.
It is opening up the conversation about how we can use these decentralised technologies.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
Blockchain technologies are revolutionising the world of transactions as heavily intermediated products and services move into a completely decentralised network.
It’s an exciting space and one we need to watch quite closely.James Scott, Chief Digital Officer – Absa Corporate and Investment Bank
But he adds, this market is still in its very early stages.
All these innovations bring accessibility, convenience and security but data is one of the key components of making that transition as seamless as possible for consumers, concludes Scott.
For data-driven insights that match foresight with sustainable possibilities, re-visit our Absa Insights page regularly to listen to thought-provoking conversations with Absa Corporate and Investment Banking sector experts in the Absa Insights podcast series.
Source : https://cib.absa.africa/home/insights-and-events/