Visa is looking to displace cash in Africa wherever they can by introducing and familiarising people to various e-payment technologies.
This is according to Mandy Lamb, Visa’s Country Manager for South Africa, who held a media briefing last week to discuss Visa’s plans in Africa.
Mandy pointed out that one must no longer think of Visa as a just a Card company. They are instead positioning themselves as an international technology network with the power to connect people and payments globally.
Across Africa Visa Card payments account for only 4% of all personal consumption expenditure (compared to globally where it would be in the teens). This shows how cash is still very dominant as a means of payment in Africa. Many governments in Africa however are keen to move their economies away from cash as it has been shown that electronic payments make a economy more efficient, as well as reducing corruption.
In order to aid this strategy, Visa has a three pronged approach when it comes to Africa.
- Increase their footprint (more places distributing and accepting cards)
- Partner with banks (working with banks to find the payment solutions which would best suit the needs of their clients)
- Increase access (banking the unbanked or underbanked, reaching out into the rural areas)
In addition to this they are also working on an initiative to drive down the cost of remittances. The current remittance market in Africa is US$32 Billion and existing remittance solutions are charging 15 – 20 %. The World Bank has stated that they want to bring this down to 5%.
Visa is therefore looking at providing the technology to help make this happen, by implementing a system where remittances can be sent directly from a bank between Visa cards (either physical or mobile cards).
Increasingly cards are becoming connected to a person’s cell phone so all you would need to send them money from anywhere in the world is their phone number. The benefit of this type of payment is that it could work locally between two friends, or across countries and continents.
In terms of Visa’s goal of moving people away from cash, working with telcos on mobile payment options is a great way to get people used to using electronic payment methods.
According to Lamb, the best way to displace cash is to increase the prompts at POS for electronic methods. Visa therefore encourages any new initiatives which encourage the displacement of cash.
Mobile Point of Sale (mPOS) devices and apps such as the Absa Payment Pebble, FlickPay or Snapscan, as well as other mobile wallet and NFC initiatives, which are aimed at small basket size transactions in environments where cash would generally be prevalent, show that there is a lot of room for growth in this area.
There is also huge opportunity when it comes to partnering with governments to encourage e-payments in areas such as, taxes, bill payments, utilities, traffic fines, etc.
