South Africans ditch physical wallets

South African consumers have led the shift towards using digital wallets to pay for goods and services, according to the SpendTrend24 report compiled by Discovery Bank and Visa.

South Africans’ use of digital wallets benchmarks well against their global counterparts, with an impressive nine percentage point increase between 2022 and last year.

Discovery Bank and Visa analysed spending data from 14 cities worldwide, including South African metros such as Cape Town, Durban, and Johannesburg.

The analysis also includes five emerging market cities and six developed market cities.

The selected international cities have a combined population of over 100 million and a GDP of nearly $4 trillion (about R70 trillion). The report analysed over 60 million credit cards and more than 13 billion transactions between 2019 and last year.

The usage of digital wallet growth in South Africa’s three biggest cities was way higher than in other world cities used in the analysis.

In Durban, it has grown by 47%, in Cape Town by 45% and in Johannesburg by 42%. This is significantly above cities in developed markets.

In places such as Los Angeles and San Francisco in the US, growth in digital wallet spending was 13% and 9%, respectively, and in Sydney, Australia it was 12%.

According to the report, the surge in digital wallet usage is driven by the fact that this mode of payment eliminates the need to carry a physical wallet.

It also offers easy payment tracking and convenience.

Moreover, digital wallets remove the risk of physical theft or loss because various layers of electronic authentication exist before the transaction is concluded. Compared to the national average, Johannesburg residents use digital wallets for in-store purchases the most.

Usage is 1.75 times more than the typical South African, followed by Cape Town at 1.5 times.

In Durban, the adoption rate is 1.3 times that of the typical South African.