Loyalty payments on the rise for SA ecommerce, according to survey


PayU, a leading online payment provider in South Africa, has released some interesting data from a recent study about South African’s online payment habits. The study reveals that more South African online shoppers are using loyalty payments.

According to Mustpha Zaouini, CEO of PayU, credit cards are still the first choice for online payments, with loyalty and EFT options gaining steady growth. The EFT statistic is especially interesting considering consumers were hesitant to use credit card for online payments only a few years ago.

An increase in loyalty points accumulation and spending could point to a rise in overall expenditure. Several loyalty programs, such as eBucks and Discovery Miles, encourage consumers to purchase products in order to gain these points, though those aren’t the only methods.

Zaouini emphasises loyalty payments:

Well designed loyalty reward programmes with strong links across industry will open up the avenues through which consumers can spend their hard-earned points and introduce them to new retailers, markets and solutions that previously would have not been on their radar.

The payments company has also found a rise in mobile payments. More and more consumers are using their phones and tablets for m-commerce shopping. Mobile payments have almost doubled in the last year. This may be due in part to the high levels of mobile penetration in Africa, which is 133% according to On Device Research. The same survey showed South Africans felt mobile internet improved their lives due to the access of information and services.

The press release further notes that the SME Mobile Readiness Survey by the wiGroup Fast Company shows that only 35% of South African retailers are allowing customers to make purchases online through their mobile devices. And 14% of respondents said they weren’t going to bother with a mobile strategy going forward.

Given the fact that retailers were polled, we are unsure if the other 65% would benefit from offering online and mobile payments to their customers.

It may be time for ecommerce stores to start looking at m-commerce as part of their sales strategy. Those who don’t could be missing out on a large portion of market share.



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