International tourists travelling in South Africa used their Visa cards to pay for approximately $1,5-billion-worth (R9,51-billion-worth) of purchases at merchants in the 18 months to June 30 this year, with those from the European Union (including the United Kingdom) accounting for $997-million (65%) of the overall spend.
Visitors from the United States contributed about 15%. Of the tourists from the EU, those hailing from the UK spent $554-million, while their German counterparts spent $143,8-million.
Similar spending patterns were recorded during the first quarter of 2005 (January 1 to March 31), with visitors from the EU accounting for 65% of the $547-million spent on Visa cards, with those from the US accounting for 15% of the spend.
Moreover, statistics collated by South African Tourism each quarter show that 23% of tourists to South Africa list the purpose of their visit as “shopping”, with about 30% of foreign tourists visiting the country “for a holiday” and 24,5% “to visit friends and relatives”.
“International payment cards play a vital role in facilitating tourism and tourist spending. They ease the difficulties travellers face when making purchases in other countries and reduce transaction costs.
“Electronic payment is an increasingly important part of international travel and a key channel for delivering tourism revenues for a global travel destination like South Africa,” said Rob Clark, Visa International’s senior vice-president and general manager for sub-Saharan Africa.
He explains by saying that more and more tourists seem to be acknowledging that using a Visa card is a safer and more convenient option than travellers’ cheques and cash: 8,8% of tourists in the first quarter of this year came from the UK, yet were responsible for 34% of the spend on Visa; 2,9% of tourists hailed from the US, and accounted for 15% of the overall spend.
To merchants, Visa cards offer the advantages of speedy and secure transaction settlement, better management of cash flow and freedom from many cost- and labour-intensive paper-based accounting processes. They also benefit from the incremental growth in purchasing power that a credit card accords the purchaser of goods or services.
“At macro-economic level, economists have demonstrated a positive correlation between electronic payment systems and consumer spending,” continues Clark, citing the findings of a Visa-commissioned study conducted by Global Insight across 50 countries, including South Africa, in 2003.
“As the number of electronic payments increased, so did consumer spending. The estimated economic spin-offs are considerable, with a 10% increase in electronic payments’ share of private consumption expenditure being likely to yield a 0,6% increase in gross domestic product, based on 2003 statistics, which would amount to an additional R7,2-billion for the economy.” — I-Net Bridge