Support for migration to electronic payment
Cash perhaps most dangerous way to pay
CASH- RELATED crimes are high and cash was perhaps the most dangerous way to transact due to the risk of physical violence, according to First National Bank ( FNB).
FNB consumer chief executive Dr Christoph Nieuwoudt said the phasing out of cheques was a major victory against crime: not only were cheques prone to counterfeiting, but the receiver of a cheque had no way of knowing whether or not it might bounce.
Nieuwoudt said cash was associated with money laundering, tax avoidance and other criminal activities, and was more expensive for the banking industry and users.
“As a result, we strongly support the ongoing migration to electronic payments. When buying online, customers are significantly better off paying electronically, especially if they pay using our virtual FNB card, which has the highest level of security, a virtual card only number and changing CVV code.”
In addition, he said that transactions can be cancelled if the product was not delivered or the service was not provided. In contrast, cash or electronic funds transfer ( EFT) payments do not have the same protection against non- delivery of service.
Nieuwoudt said greater collaboration between the industry and the government was essential to combat these types of crimes. “We also have institutions like South African Banking Risk Information Centre that co- ordinate efforts between banks and co- operation with network providers and operators,” said Nieuwoudt.
The bank said the accelerating rate at which retailers were enabling consumers to pay digitally at the point of sale was fuelling the growth of digital payments in South Africa. FNB said the scan- to- pay and tap- to- pay functionalities on the FNB app recorded the highest month- on- month usage growth in August since their launch.
The bank said that month- onmonth transaction volumes on scanto- pay grew by 36 percent in August, while values increased by 39 percent.
Use of the tap- to- pay functionality increased by 48 percent, with values growing by 54 percent.
New research from Yoco, a financial platform for small businesses, found that the Covid- 19 pandemic has sharply accelerated the move away from buying with cash as customers increasingly demand low- touch or contactless payments.
According to FNB, scan- to- pay enabled users to scan a QR code to make secure payments at a physical point of sale ( Pos) or on a merchant’s website using the FNB app. Tap- to- pay also allowed users to pay for goods by simply tapping their smartphone to pay at a Pos while relying on the security of the FNB app.
The bank said these insights were consistent with the 28 percent increase in FNB app usage volumes reported for the previous financial year.
“This is also in line with customer behaviour shifting towards contactless in general, as customers realised the convenience and security benefits with contactless card transactions at Pos growing month- on- month at 16.4 percent.
Raj Makanjee, the chief executive of FNB Retail and Private Banking, said digital payments had received a significant boost over the course of the Covid- 19 pandemic as more consumers and retailers were embracing the need for safety and efficiency.
Digital payment methods were equally important for consumers because people can be less reliant on cash and cards by choosing to pay using their cellphone.
FNB Digital Payments head Jason Viljoen said consumers needed to be cautious when using third- party online payment platforms, which required them to provide their online banking user name and password login credentials to pay via instant EFT.