South Africa continued its record performance to become one of the fastest-growing payment-card countries in the Central and Eastern Europe, Middle East and Africa (Cemea) region in the year to the end of June, Visa International Cemea announced on Monday.
South Africa witnessed exceptional growth on all key parameters — including card numbers, card sales volume (CSV) and retail sales volume (RSV).
During the year ending June 30 2004, RSV (spending at the point of sale using Visa cards) grew by 57% from the same period last year to reach R53,6-billion. South Africa has recorded one of the highest RSV growth rates in the region.
“While card growth and overall spend are important, the key growth measure for Visa is RSV. When cardholders use their cards at [the] point of sale, they are maximising the safety and convenience their Visa card provides.
“It also keeps money in the banking system, funds which can be used for commercial loans, the lifeblood of a growing economy,” said Chris Winter, Visa Cemea’s general manager and senior vice-president for sub-Saharan Africa.
CSV (which measures RSV plus cash advances and withdrawals at ATMs) grew by 77,2% to reach R161,95-billion.
Visa also registered exceptional growth in the number of cards issued by South African member financial institutions. At the end of June 2004, there were 10,3-million Visa-branded cards in South Africa — a growth of approximately 30% year-on-year. Visa Electron debit cards closed with 7,8-million cards and registered a growth of 41%.
Spending at point of sale on Visa Electron debit cards grew by 181%.
Visa credit cards crossed the two million mark with 2,01-million cards in the market. In terms of card usage, South Africans used their cards 354-million times, 30% growth on the previous year.
“It is encouraging to see such strong growth of spending with debit cards. Whilst credit-card spending is still growing steadily, the exponential growth in the number of Visa Electron cards suggests that South African consumers are managing their spending carefully and that the Visa brand has become a symbol of consumer trust and confidence for cashless card payment in South Africa.”
The vast majority of Electron cards are debit cards. Debit cards are ‘buy now, pay now’ electronic payment tools that deduct funds directly from the cardholder’s bank account. Any consumer with a bank account can apply for a Visa debit card with a Visa issuing bank and does not need to qualify for credit eligibility.
With debit cards, cardholders can only spend within the limits of what is in their bank accounts.
“The success of debit cards has also helped Visa member financial institutions grow their business beyond more traditional credit-card products.
“One of our core business strategies in South Africa is to continue to focus on expanding Visa debit cards to the substantial unbanked population, accelerate our progress to a cashless society, as well as to increase consumer awareness and encourage greater payment-card usage,” said Winter.
“With the growing range of innovative payment products and services offered by Visa member banks, we will continue to bring ever greater choice, convenience, and control to consumers and businesses,” said Winter. — I-Net Bridge