2023 – Economists’ Predictions

With 2023 in full swing already, we would like to thank you for your continued support by choosing us with your journey to financial freedom. May this year be a blessing to you and your family!

We had a look at what some of the country’s top economists predict for the year to come. To combat the negative outlook, we also added some money savvy tips.

Economic Growth

Financial services company BNP Paribas said that South Africa will likely see weak economic growth in 2023 as the country faces global headwinds and further domestic challenges.

The company estimates 2023 GDP growth to reach 0.2% – reflecting a weaker net trade and consumption outlook.

“On top of this black growth view, we expect inflation to remain sticky for longer as the lagged effect of higher wages and rebounding service prices eat into disposable incomes, forcing more action out of the SARB (South African Reserve Bank),” said BNP Paribas.

Combined with low expected growth, the group said that stagflation risks loom large in South Africa. Stagflation refers to a period of economic hardship characterized by stagnant economic growth, high unemployment, and rising prices (inflation). Stagflation can be particularly damaging as it can lead to a decline in living standards and a decrease in investment, further inhibiting long-term economic growth.

This year in South Africa will be tougher economically than 2022, said BNP Paribas. Key trading partners such as Europe and the US are also expected to face headwinds.

The long-standing energy insecurity domestically is likely to intensify – halting economic progress even more.

Labour and inflation

Like other countries across the globe, South Africa faces disinflation in 2023, particularly in the second half of the year. This is not the first warning of stagflation in South Africa. In May2022, the SARB noted that global stagflation is one of the major concerns for the economy.

The central bank said that continuous slow and inequitable growth, rising inflation, and extra pressure on key sectors of the financial system would all result from stagflation.

Jeff Schultz, said in November2022, that the Reserve Bank would unlikely slow down on rate hikes, contributing further to a rough period of stagflation.

Most economists forecast an average CPI rate of 6.0% in 2023 after 6.9% in 2022 – implying two straight years at or above the SARB’s less-desired upper 6% target bank. Until food and public transport price rises move out of the double-digit territory, inflation expectations will struggle to lower.

With high unemployment a key driver of stagflation, higher wage demands places additional pressure on the economy.

Interest Rates

Prominent economists expect the South African Reserve Bank (SARB) to increase rates twice in the first half of 2023.

In November 2022, the SARB’s Monetary Policy Committee (MPC) increased the repo rate by 0.75 basis points to 7%. It was the eighth interest rate hike in the current cycle, with a total of 350 basis points increase since the hike cycle started a year ago in November 2021.

The Reserve Bank is expected to continue increasing rates as there are still concerns about inflation.

Nedbank chief economist Nicky Weimar predicts two more 25 basis point rate hikes within the first half of 2023.


BNP Paribas forecasts more than 200 days of load shedding in 2023, mostly between stages 3 and 4 – compared to last year’s ‘norm’ of stages 1 and 2.

South Africans should expect load shedding to get worse in 2023, says Intellidex analysts Peter Attard Montalto, who forecasts stage 7 load shedding – or higher – by the middle of the year.

Estimations are that the prolonged Stage 6 load shedding wipes out approximately R4 billion from GDP each day, far surpassing the economic impact of Covid-19. Some economists estimate that the SA economy would be 8% to 10% larger if Eskom had not failed to electrify the country.

Department of Social Development

In a presentation to parliament this week, the department said that about 31% of the South African population relies on social grants – which include everything from disability to childcare.

However, there are approximately 10 million beneficiaries who depend on the grant. This means that almost 30 million of South Africa’s 60-million citizens are now welfare recipients.


Confidence in South Africa’s future has fallen after more than a decade when average economic growth failed to match the increase in population, meaning the country’s citizens have been getting poorer. The country has been afflicted by corruption scandals in recent years and regular power outages since 2014. More than 350 people died in a spate of looting and arson in July 2021. This day of looting came with a hefty R50 billion price tag. The violence reflects an economy that has been “stagnant for more than a decade,” said Gerbrandt van Heerden, an analyst at the Johannesburg-based think tank. “A lot of the unrest that South Africa has experienced this year and before are connected to a failing state.”

Data shows there is a strong correlation between economic growth and social stability and rioting and looting could become more prevalent in the next few years unless the authorities are serious about implementing reforms. Small business will likely suffer the most from frequent unrest and higher crime levels will weigh on South Africa’s ability to attract investment, he said.

The government has formally adopted five blueprints to boost gross domestic product and job creation since the ANC won the nation’s first all-race elections 27 years ago. However, most of the policies have been stalled by powerful vested interests and policy paralysis, which left Africa’s most-industrialised economy stuck in its longest downward cycle since World War II even before the coronavirus pandemic hit output.

A recent study shows that 53% of university graduates and 43% of citizens earning more than R20,000 a month may leave the country. If an increasing number of South Africa’s richest people leave the country, the number of those paying tax, which supports welfare payments to almost half of South Africans and other government services, will plunge.

Our Tips: Budget, Get rid of debt, Save and Inspect

Budget– know exactly where all your money goes, where you can adjust to save even small amounts, and how to effectively save and leave enough money for unexpected expenses and emergencies.

Get rid of debt– whether it’s an inheritance, a bonus, investment returns or winnings from a competition, any extra income should be put towards paying off debt.

Save- set aside a certain amount for savings and investments. This money can be put aside for a big goal such as a holiday or education, or it can used for a rainy day or to take care of expenses due to loss of income.

Inspect– re-evaluate their fixed monthly expenses on memberships, subscriptions, and insurance. There may be memberships and subscriptions that are being paid for but are not in use now.

Stay Savvy,


Lessons from Santa

Santa Claus knows what it takes to manage his money properly, and he certainly walks the walk. Living by the “Generosity First” rule, Santa also works year-round to meet his annual goals, so he’s a saver. He also makes a list and checks it twice, indicating he knows how to budget his money and time.

Santa has little choice but to manage his money wisely. After all, his huge operation at the North Pole requires multiple global sources of natural resources and technology. He already has his human… er, elf resources covered, but Santa still needs to pay for things like lumber and precious metals that the North Pole generally lacks.

With his own list-making principle in place, Santa doesn’t need to stress over forgetting his obligations. With centuries of experience, Santa knows that humans make mistakes with their own finances but that through habitual list-making and checking, mistakes have essentially been reduced to zero.

Sending a letter to Santa must be one of the purest traditions of the Christmas season. Every year, a child puts pen to paper and writes down his or her sincerest wishes, the ones stored deep in his or her innocent—or, in some cases, mischievous—little heart. Here are some of the cutest examples we came across.

This year and every year, as you give, save, and prepare, we wish you and your loved ones a Merry Christmas, Happy Holidays, and a Prosperous New Year! And may your letter to Santa this year be as sincere as these ones.

Stay Savvy,


New Look, New Offerings

Our updated website is now live! And with that I have some news to share: We now offer financial coaching, where we will be taking a closer look at the behavioural side of finance and how to help keep emotions from derailing long-term financial success. Whether it’s designing a plan for your retirement goals, budgeting, implementing immediate debt control or understanding your relationship with money, we want to be there to guide you.

Over the past 22 years as a financial planner, I have come to realise the importance of the psychology of money and our behaviour towards it. I have always been fascinated with how much our childhood understanding and relationship with money, the environment we grew up in, our parents’ relationship with money and what we perceive as happiness through wealth, all have an impact on our future money decisions.

Morgan Housel wrote that “doing well with money has little to do with how smart you are and a lot to do with how you behave. And behaviour is hard to teach, even to really smart people. A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary people with no financial education can be wealthy if they have a handful of behavioural skills that have nothing to do with formal measures of intelligence.”

We think about and are taught about money in ways that are too much like physics (with rules and laws) and not enough like psychology (with emotions and nuance). Money is everywhere, it affects all of us, and confuses most of us. Everyone thinks about it a little differently. It offers lessons on things that apply to many areas of life, like risk, confidence, and happiness.

Few topics offer a more powerful magnifying glass that helps explain why people behave the way they do than money. It is one of the greatest shows on Earth.

We need to relook at the way we approach money. Big goals take big commitment. Doing something new or scary is always better (and more likely to happen) with a partner or a guide. That is where our financial coaching comes in. Financial coaching is a specialised type of coaching that helps clients develop financial literacy and money management skills.

The more you earn, the more you spend, the bigger the house, the car, the fancier the restaurants, the more elaborate the holidays, the higher the debt ratio. We are bombarded by “the good life” on every single media platform. We believe all those luxuries will make us happy.

Using your money to buy time and options has a lifestyle benefit few luxury goods can compete with.  More than your salary. More than the size of your house. More than the prestige of your job. Control over doing what you want, when you want to, with the people you want to, is the broadest lifestyle variable that will create true happiness.

Be nicer and less flashy. No one is impressed with your possessions as much as you are. You might think you want a fancy car or a nice watch. But what you probably want is respect and admiration. And you’re more likely to gain those things through kindness and humility than horsepower and chrome.

We would love to be a mentor to help grow your skills, make better decisions, gain new perspectives, or provide you with the tools that can help with goal-setting and intentional living.  Whatever you want to achieve through our financial coaching sessions, we would love to guide you on your journey to financial freedom.

Stay Savvy,


Yes, we love global investment exposure

With the Limited offer Liberty Structured Global Performer V2 and the Liberty Structured Global Performer ESG V2 portfolios, you can invest Global, without fear of any currency fluctuations. Liberty is providing you with a way to access global growth and diversify your world.

The prized goal of a solid investment is to achieve the growth you seek, while minimising the risk involved. The Liberty Structured Global Performer V2 and Liberty Structured Global Performer ESG V2, available under the Evolve Investment Plan and the Evolve Investment Plan (Sinking Fund) are designed to give you just that:

  • some downside protection
  • no impact from currency fluctuations
  • global investment opportunities

The two portfolios have similarities, with the Liberty Structured Global Performer ESG V2 screening for companies that adhere to the global principles of responsible Environmental, Social and Governance management. So, if you love the idea of making the world a better place while growing your money and hate not knowing how to do it – we’ve got the solution. Or, if you love exposure to top-quality globally-rated companies but hate the admin of taking money offshore – this is the perfect solution.

These structured portfolios give investors access to some of the leading global companies in the US, European and Asian markets through exposure to the S&P 500, Eurostoxx 50, and MSCI Global Diversified ESG 100 Decrement 5% indices.

If you invest a lump sum of more than R1m, you receive a capital allocation enhancement of 1%. For investments greater than R3m, you receive 2%.

I personally love the Performer ESG V2 fund, with the MSCI Global Diversified ESG 100 Decrement 5% Index (EUR) giving returns of more than 20% last year.

It gives a minimum return of 13.50% p.a.(companies 12.10% p.a.) if the change in the value of the basket is positive at Maturity Date (after adjusting for tax). If the change in the value of the basket is greater than 13.50% p.a. (companies: 12.10% p.a.) at Maturity Date, after adjusting for tax, you receive all the growth (adjusted for tax).

If you want your capital protected, access to some of the largest and best performing companies in the US, European and Asian markets including Apple, Microsoft, Tesla, Amazon and Berkshire Hathaway, and want a Rand-denominated investment to mitigate currency fluctuations, contact us. Minimum investment amount: R250 000 (non-retirement / discretionary monies only).

These are limited offer structured products, last day to invest 2 December 2022.

Stay Savvy,


Continued Repo Rate Hikes

The South African Reserve Bank decided to increase the Repo rate (Repurchase Rate) by a further 75bps to 6.25% at its MPC meeting last Thursday. The decision was not unanimous, with two members of the MPC preferring an increase of 100bps. The decision was in line with market expectations, although some analysts had argued that the better-than-expected core inflation data for August (released last week), coupled with Stage 5/6 electricity outages should have encouraged the Bank to hike rates by only 50bps. Instead, the MPC statement highlighted the upside risks to SA inflation and made it clear that the Reserve Bank is committed to getting SA inflation firmly back inside the target range. The fact that two MPC members voted for a hike of 100bps emphasised the hawkish tone of the MPC decision. The Reserve Bank last adjusted interest rates on 21 July 2022, when they increased the Repo rate by 75bps. Since November 2021, the Repo rate has now increased by a total of 275bps. South Africa’s prime interest rate should now increase to 9.75%.

The Reserve Bank once again highlighted the upside risks to SA inflation, which is still focused on a wide range of factors, including food, fuel, and wages, but they also continued to flag concerns about the cost of electricity as well as the potential impact of further currency weakness. The Bank’s forecast for headline inflation in 2022 is unchanged at 6.5% but they revised their 2023 estimate down to 5.3% from 5.7% previously. For 2024, the Bank’s inflation forecast is fractionally lower at 4.6%, down from 4.7% previously. In that regard, it is a little odd that the MPC would highlight that the risks to SA inflation are weighted to the upside, but then revise down their inflation forecast for 2023.
It is also odd that the MPC changed their risk assessment of SA’s economic growth. Back in July, the MPC highlighted that the “risks to SA growth are weighted to the downside”. However, in the latest MPC statement the risks to SA economic growth have been revised to “neutral”, yet SA is experiencing stage 5/6 electricity outages, interest rates have risen further and global growth has weakened. This would suggest that the bank is being too complacent regarding the negative impact of aggressive rate increases on the performance of the SA economy. It is also likely that the MPC has become more beholding to global interest rate developments than the MPC statement would suggest and that “protecting the Rand” is a critical factor in the setting of SA interest rates. The Reserve Bank’s SA GDP growth estimate for 2022 was revised down slightly to 1.9% from 2.0%, while their 2023 estimate was increased fractionally from 1.3% to 1.4%. For 2024, SA GDP growth is forecast at a still modest 1.7%, up from 1.5% previously.
Overall, the latest interest rate decision needs to be viewed within a global interest rate context. It can be argued that SA should not increase interest rates aggressively considering the current weak economic environment, high food and fuel prices (which are difficult for most households to avoid), high unemployment and service delivery constraints. However, the Reserve Bank has repeatedly highlighted their desire to ensure that SA inflation is anchored around the mid-point of the inflation target, and noted that allowing SA inflation to remain above the inflation target unchallenged is unacceptable and would undermine the recent gains in getting inflation expectations lower. Without rate hikes, SA has a high risk of quickly developing a self-reinforcing upward spiral in inflation, driven by wage demands and a weaker exchange rate.
At this stage it seems reasonable to assume that the Reserve Bank is likely to continue to hike rates during the remainder of 2022 (final MPC meeting on the year is scheduled for 24 November 2024) and into early 2023. However, is also seems fair to assume that once inflationary pressures have abated more convincingly, the bank will want to pause and more clearly assess the need for any further rate hikes – especially if SA’s inflation rate is heading towards 4.5% at the end of 2023 and other major central banks are also looking to end their own rate hiking cycle.

Stay Savvy,


Shop Smart and Budget

In our previous NewsBrief, we mentioned how middle-income consumers are spending up to 80% of their monthly salary within five days of being paid. A BusinessTech survey revealed earlier this year that 76% of respondents indicated that they save less than 15% of their salary, while 35% said they don’t save any money at all.

South Africans are notoriously known for being bad savers. So, in times like these when the economics are against us, it’s even more important that we get back to tried-and-tested money basics.

Budgeting is a great way of taking control of your finances. When you budget, you know exactly where all your money goes, where you can adjust to save even small amounts, and how to effectively save and leave enough money for unexpected expenses and emergencies.

Some of the best tried-and-tested budgeting methods include:

  1. The 50/30/20 budgeting rule: This strategy operates as an easy guideline for planning your budget by allocating 50% of your net income to needs like rent, groceries, and utilities; 30% to wants such as hobbies, vacations and dining out; and 20% to financial goals (that is, savings and debt payments). The further outlines that the reason this strategy works is because an integral part of succeeding at properly executing your budget is to understand your priorities and budget according to these.
  2. The 80/20 rule: Another budgeting method is the 80/20 rule which sets aside 80% of your income to needs, wants, and debts and then 20% is strictly designated for savings.
  3. The 70/20/10 rule: An alternative to the above rule, which says 70% goes to living expenses, 20% to debt payments, and 10% to savings.

By saving money, you avoid debt, which in turn relieves stress. If you have overwhelming debt, seek help sooner rather than later, and address it while ensuring you keep your compulsive spending at bay.

Budgeting doesn’t need to be complicated, nor should it take hours out of your day. In fact, the best ways to budget are often the simplest. And the easiest to become habit-forming.

Becoming a smarter shopper is a great way to save. Due to the unexpected changes in food costs, it can be difficult to prepare healthy meals without going over the budget. A few tips on shopping smarter include:

  1. Prepare a grocery shopping list beforehand and stick to it. Ensure that you limit the time in the store and only purchase the necessities.
  2. Shop around for the best prices on the items that you need to purchase, considering the weekly store leaflets, newspaper advertisements and visiting the stores’ websites or applications.
  3. Get to know the food prices. Write down the regular prices of foods you buy often. This will help you figure out which stores have the best prices and if you are getting a good deal on sale items.
  4. Always check the “use by dates” that are on the food items to reduce early spoilage and wasted money.
  5. Use a basket instead of a cart as you will have less space and it will force you to limit your purchases to necessities.
  6. Never go shop on an empty tummy 😊

Stay Savvy,


South Africans crushed by the volley of living cost increases

Middle-income consumers are spending up to 80% of their monthly salary within five days of being paid. In addition, salaried middle-income consumers with credit, spend on average, 30% of their income on unsecured credit and 35% on secured credit.

CEO of Debt Rescue Neil Roets says that their latest survey results show this to be true, with 40% of consumers saying they have too much debt to cope with, and results showing that 40% have impaired credit records.

He warns that this is akin to a national disaster given that countries around the world rely on the middle class to keep afloat – and South Africa is no exception.

He says the danger lies in the possibility – and it’s becoming more of a reality with every passing day – of the bulk of South Africa’s middle class being pushed below the poverty line.

“The reality is that South Africans are being crushed by the volley of living cost increases that just keep hitting them from all sides and can no longer cover their basic costs – and it’s the middleclass consumer that has turned to credit en masse to see them through. This is a very precarious position to be in, both for consumers and for the country at large. The repercussions of which will soon be felt as consumers head for a tighter money crunch, as a perfect storm is stirred up by increased interest rates, rising inflation and steeper fuel and electricity prices,” he cautions.

Statistics SA’s latest consumer price index shows that inflation is going through the roof – with annual consumer price inflation quickened to 6,5% in May this year from 5,9% in April and March, breaking through the upper limit of the South African Reserve Bank’s monetary policy target range.

This is the highest reading since January 2017 when the rate was 6,6%. And it’s no surprise that fuel in particular is a major contributor. In fact, the impact of fuel is so great that removing it would see the headline rate fall from 6,5% to 5,1%.

South Africa’s higher-than-expected inflation data in June points to a further interest rate hike in July, but there is still some uncertainty about how much the central bank will hike by. The South African Reserve Bank is now forecast to follow up the 50bps hike in May with another 50bps rise in July, or even a 75bps SARB hike in July in ‘sympathy’ with the Fed and central banks in countries like Chile, Mexico and Poland that have all recently upped the ante with moves of 75bps.

The high cost of essential foods results in a lot of nutritious food being removed off family plates. More and more consumers will be purchasing these foods with their credit and store cards every month, and that is the start of a dark downward spiral. No matter how difficult it became to balance the monthly budget, using debt to service living costs is a recipe for disaster – it’s like digging a hole that you can never climb out of.

Stay Safe,


Your Retirement Plan and budgeting for Future Healthcare

Many pre-retirees tend to underestimate their post-retirement healthcare costs and use their current health status as a guideline for what their future health will look like. The reality, though, is that many diseases and chronic conditions are a function of ageing, and your fortunate good health in the years leading up to retirement is not guaranteed to continue as you grow older.

While it’s common knowledge that medical inflation outstrips consumer inflation year-on-year by between 3% and 4%, it is absolutely essential that these inflationary assumptions are built into your long-term retirement plan to ensure that you don’t run into financial problems.

But perhaps the biggest expense to factor into one’s long-term healthcare plan is that of assisted living, frail care, or private nursing which are generally not covered by medical aid. The costs of this type of care can be prohibitive for many elderly people, the result being that they end up being cared for by their families. This, in turn, can place an additional emotional and financial strain on the extended family – affecting the entire family who often buckles under the burden.

Every retirement plan should therefore cater for regular and unforeseen medical expenses, and possible full-time care, while considering the effects of medical inflation over time.

Providing for the daily living costs of your elderly parent – whether part or in full – can be enormously expensive. Besides costs such as groceries, toiletries and fuel, there are numerous other costs that need to be considered.

Frail care facilities can cost anywhere between R13 000 and R25 000 a month, while full-time private care can cost up to R60 000 per month.

According to Stats SA, 38% of South Africans over the age of 60 use chronic medication, around 20% use assistive devices such as spectacles, 10% wear hearing aids and 5% use wheelchairs, all of which are not necessarily fully covered if you are on medical aid and would need to be paid for out of pocket.

So what forms of cover should be considered to manage health-care expenses in retirement?

  1. Retirement Annuity: An RA can be a useful savings tool during retirement, offering tax deductions on contributions. At a certain age, when you need the extra money, the RA can be converted to a living annuity, which can then supplement your income for medical expenses.
  2. Dread disease cover: This is an important consideration to cover against severe illnesses like dementia or cancer which can have immediate consequences for your lifestyle, with big financial implications. With cover in place, you will receive a lump sum upon diagnosis which will help with expenses and lifestyle adjustments.
  3. Medical aid and gap cover: With medical aid in place, you are covered for in and out of hospital expenses. By having gap cover as well, you are safeguarding yourself by being able to cover any shortfalls in medical expenses or emergencies that result in additional unforeseen expenses.

A retirement plan should always include a ‘worst-case scenario’ when it comes to budgeting for future healthcare costs to ensure that there are sufficient funds set aside for full-time care should the need arise. If left unfunded, you effectively transfer the financial burden onto your adult children and other family members which, in turn, will only serve to compromise their own retirement funding.

Stay Safe,


What you should know about life insurance as you grow older

Birthdays shouldn’t just come with cake and presents; they should also be a reminder that if you don’t have life insurance cover in place you will probably be paying much more when you do decide to take out a policy.

The right time to buy life insurance varies from person to person, depending on family and financial circumstances. Generally, you need life insurance if other people depend on your income, or if you have debt that will carry on after your death. After all, you don’t want to leave your loved ones without money to live on.

When should people take out a life insurance policy?

There is no right or wrong age but the longer you wait, the more you will pay and the higher the risk, especially if you have a family that depends on your income. Waiting to purchase life insurance can have a greater impact on an attempt to purchase a policy. Medical conditions are more likely to develop as an individual grows older. If a serious medical condition arises, a policy can be rated by the life underwriter, which could lead to higher premium payments or the possibility that the application for coverage can be declined outright.

Why should you have life insurance?

Life insurance is a financial gift that you leave your loved ones that will protect them from financial fallout in the event of your death and allow them to continue with the most important things.

How are life insurance premiums calculated?

Different people will have different premiums because several factors including age are used to determine your risk and therefore the premium. Other factors that can be considered when premiums are calculated include gender, overall health including weight, any pre-existing conditions, smoking status, family history and occupation.

What should you consider when planning for life insurance?

There are two things that people should consider before taking a life insurance policy:

  • Life stages

Depending on their life stage, a person may require comprehensive insurance, especially if they have children and long-term financial commitments such as home and car loans.

  • Disability cover and severe illness cover

If a person takes this cover, then their family is cushioned financially in the event of a disability or severe illness. Disability cover is for insured people who can no longer earn an income due to a temporary, partial, or permanent disability. Severe illness or dread disease cover pays out a single amount when the insured person suffers a severe illness.

The longer you wait to buy life insurance, the more expensive it will get. Moreover, if you wait you run the risk of deteriorating health, which may make you ineligible for some life insurance at that point. When you should get life insurance will depend on your personal and family situation, along with your finances and obligations. But in general, the younger you are the better if you do think you’ll need life insurance coverage.

Stay Safe,


The Future is Contactless

For the past 10 years, we’ve been hearing about how new-generation mobile apps, wallets, tap-to-pay, NFC solutions and even the humble QR code are going to spell the end of the magnetic stripe card as a means of payment. And here we are, in 2022, and we’re finally taking big steps towards a brave new world of contactless payments.

In fact, contactless payments are possibly the hottest trend in the financial services industry right now. Globally, Accenture predicts US$7 trillion in consumer spending will shift from cash to cards and digital payments by 2023. The Deloitte Africa Digital Commerce Survey found that 22 million South African consumers shopped online in 2020, growing to 32 million by 2024.

Mastercard has become the first major payment provider to start phasing out the magnetic stripe on its cards. By 2033, no Mastercard credit and debit cards will have magnetic stripes. In fact, physical cards are steadily being replaced by virtual cards, which are both safer and more secure.

As businesses scramble to adapt to a world of reduced cash and physical card transactions, we see the major advantages for contactless over old-school payment methods:

Germ-free, easy transacting

Contactless was initially all about ease of use. With Covid-19, the ‘no-touch’ aspect became the big winner. Using contactless methods to accept payments means there’s no need to handle cash or a card. Depending on the technology, there’s no need for customers to physically interact with a point-of-sale (POS) device, enter a PIN or sign a receipt.

It’s safe and secure

We’ve all heard horror stories about card-skimming. You think you’re swiping your card for that latte, and next thing you’re seeing unexpected transactions going off your account. With mobile wallets and virtual cards, you don’t even need to carry your bank card, and the merchant doesn’t see any card or banking details. With QR codes, which remain popular, each QR code is randomly generated, ensuring your personal information always remains safe.

They bring more people into the digital economy

As more digital payment solutions come to market, we’re seeing growing numbers of South Africans participating in the digital economy for the first time. And with solutions like QR codes, merchants don’t even need specialised hardware or POS equipment: the technology needed to enable QR-based payments is typically software-based, which makes it simple and quick to implement and allows merchants to offer a better checkout experience. This is going to be a huge advantage for the informal sector and micro-businesses.

It goes beyond the payment

Contactless payments don’t just create safe transactions: they add an entire new layer of brand benefits. The speed and ease of contactless payments allows brands to create better service for their customers with fewer abandoned transactions. Anything they can do to simplify the customer experience and reduce transaction time is a win. On average, it takes 6 to 7 seconds to process a cash transaction. This is reduced to 1 to 2 seconds for contactless. It doesn’t sound like a lot, but the difference it makes to customers is huge.

The research is overwhelming: South African consumers want the ability to make contactless, easy payments. And they want it now. Merchants that ignore the benefits of contactless payments do so at their own peril.

Stay Safe,