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A comprehensive overview of the cards, payments and consumer banking market in South Africa, with clearsighted commentary backed by relevant data.
Technology plays an increasingly important role, with digital banking growing fast and new banks challenging incumbents purely through digital offerings.
This payment landscape could have its own domestic network in the near future, with the central bank consulting with stakeholders about creating a domestic card network.
There is also an increasing regulatory push to reduce cash use in the country, and the emergence of new technologies such as QR codes, SoftPOS, mPOS provided by non-banks is set to drive down the cost of payment acceptance for merchants and increase access to cashless payments.
How regulation and competition are combining to drive change.
Why cash usage is under increasing pressure.
Which challengers are breaking the established lenders' grip.
How opportunities are growing fast thanks to mobile.
Where issuers are now focusing in a changing economy.
TABLE OF CONTENTS
Demographics and the economy
Key retail banks and issuers
Acquiring and processing
Regulatory and other cards market information
South Africa Country Report Data Tables
(All 2015-24F unless otherwise stated)
1: Demographic and economic indicators.
2: Ownership of key consumer devices.
3: Internet usage by population.
4: Access points: 2015-21E.
5: Account penetration.
6: Consumer payment trends 2015-22F.
7: B2C e-commerce payment methods: 2015-22F.
8: Total card payment metrics.
9: Contactless card metrics.
10: Credit card numbers.
11: Total credit card metrics.
12: Credit card profitability indicators.
13: Debit card numbers: 2015-2020.
14: Debit card metrics: 2015-2020.
15: Profit pool: credit card numbers, billed volumes, outstandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).
(All 2015-22F below unless otherwise stated)
16: Networks' credit card market shares.
17: Networks' credit card data numbers.
18: Networks' credit card billed volume.
19: Networks' number of credit card transactions.
20: Networks' average credit card transaction value.
21: Credit card interchange fees by network: 2015-21E.
22: Networks' debit card market shares.
23: Networks' debit card data numbers.
24: Networks' debit card billed volume.
25: Networks' number of debit card transactions.
26: Networks' average debit card transaction value.
27: Debit card interchange fees by network.
28: Key credit card issuers market shares by credit card numbers: 2017-22F.
29: Key issuers market shares in credit card outstandings: 2017-22F.
30: Key debit card issuers market shares by debit card numbers: 2017-22F.
31: Merchant acquirer credit card market share: 2021E.
32: Credit card merchant service charges: 2015-24F.
33: Merchant acquirer debit card market share: 2021E.
34: Debit card merchant service charges: 2015-24F.
35: Credit card issuer/issuing processor relationships: -
36: Credit card acquirer/acquiring processor relationships: -
37: Credit card issuing processor market shares by card numbers: 2021E.
38: Credit card acquiring processor market shares by the number of POS transactions: 2021E.
39: Online merchant acquirer market share. 2021E.
Demographics and Economy
The country possesses Africa's third-largest and most industrialised economy, accounting for about 13% of the continent's GDP. Nonetheless, despite its successes, South Africa has one of the highest levels of income inequality in the world.
South Africa's payment systems are among the most developed compared to other regional markets. There were an estimated 50.1 million payment cards in 2020, of which 43 million were debit cards.
In 2020, some 1.7 billion payment card purchase transactions were made in South Africa, with an average value of $52. The country has the largest payment cards market in sub-Saharan Africa in terms of cards in circulation.
Mobile payments in the country have failed to take off at the same rate seen in markets such as Kenya. This is a result of a highly developed financial services sector and a relatively high banked population.
In 2020, pre-tax profits reached an estimated $408 million, a contraction of 7% compared with the previous year. As the pandemic developed in 2020, banks cut back on higher-risk lending.
Major credit card brands are issued and accepted in South Africa. Debit cards are seeing an increase in their share at the POS. Billed volume at the POS with debit cards increased from 41% in 2015 to 48% in 2020.
Key Retail Banks and Issuers
Despite the high level of concentration, retail banking here has proven to be dynamic, with new and smaller, more digital-centric banks successfully challenging the Big Four's market share.
Acquiring and Processing
South Africa's acquiring is mainly performed by banks, responsible for an estimated 93% of POS billed volume during 2021. Both issuing and acquiring processing are typically conducted in house by South African issuers and acquirers.
The pandemic fuelled online shopping, lifting South Africa's B2C e-commerce sales by an estimated 69% in 2020 to more than $4 billion. The categories that experienced the highest growth were clothing and groceries.
Regulatory and Markets Information
South Africa's financial services sector has a sound regulatory and legal framework with well-established domestic and foreign institutions providing a full range of services.
Banking Association of South Africa
BNP Paribas Personal Finance
Financial Services Board
First National Bank
Live Better Benefits
Payment Association of South Africa
Retail Association of South Africa
RMB Private Bank
South African Airways
South African Banking Risk Information Centre
South African Reserve Bank
South African Social Security Agency
Truworths Financial Products
Virtual Card Services
Woolworths Financial Services
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