The rising popularity of debit cards complements the traditional credit card market.
“Some customers don’t qualify for credit and they will use a debit card because it is their own money to which they have access — and the fact that you can use your debit card at both an ATM and at point of sale is one of the reasons it’s becoming so popular,” says Carolina Reddy, director of Card Business Services for Standard Bank.
On the proliferation of new cards in South Africa, Reddy points out that the Mastercard associate brand commands just less than 36% of market share — a figure that has maintained in the face of growing competition.
“We strategically decided prior to the NCA to slow down our outbound campaigns and to focus more on our internal customers. I don’t see retail cards as a threat because of acceptance issues, whereas the Mastercard and Visa cards give you far more acceptance.
“We issue Standard Bank cards under an association with Mastercard or Visa, which allows for acceptance at multiple merchants or other banks internationally.”
The implications of the National Credit Act — a year old this month — are being fully assessed, Reddy says: “We’ve seen a slowdown, mainly because of affordability checks and the fulfilment process has become far more onerous, from a customer’s perspective as well as ours.
“This has been a challenge, with customers saying that the process is taking too long and that there are too many documents to fill out.
“But, even though the process is onerous, we agree that it has been put in place to protect both the customer and the bank.”