With Covid-19 impacting every aspect of our daily lives, the demand for online and contactless payments has now become vital as our country grapples to arrest the spread of the global pandemic, whilst reopening economies. Concerns have mounted around whether cash might play a role in spreading the virus. This was after the World Health Organisation advised the public to immediately wash their hands after handling cash.
On the ground, we are witnessing people opting out of making cash payments or using touch point-of-sale machines. In light of this digital payments are limiting in-person transactions and ensuring consumers have access to goods, services and essentials from the comfort of their homes.
While Ramped up e-commerce initiatives are also helping small businesses keep revenue flowing during these uncertain times. Online payments are even helping to put stimulus funds into consumers’ hands more rapidly. For example: locally, the presidency with the Solidarity Fund has partnered with automated online bank payment solution Ozow to make fund collections secure and seamless. Riaan Hanekom, Ozow’s Chief Technology Officer shed some light into the current state of digital payments in South Africa.
- What is the importance of digital payments in 2020?
The most important benefit especially in an African context, is that digital payments help financial inclusion. They lower the cost of financial services and provide a great level of convenience for customers. It’s also a safer way of using money, since digital payments have increased security; its traceability decreases the likelihood of theft.
- Why does it seem like the uptake of digital/online payments are slow in South Africa?
The uptake in digital payments and online payments have increased tremendously over the last couple of years. If you look at South Africa as a whole, it’s still predominantly a cash based society – even with the penetration of online devices. So with smartphones, tablets and so forth, cash is still keen. I think a part of the problem is traditionally, the availability of money touch points which hasn’t been that ubiquitous. So cash continues to be the chosen platform and this problem has not quite been solved yet.
We might be a little bit behind other countries in world with regards to the uptake of digital payments. But with this said we are seeing more and more of an uptake every single year. As we all know, the younger generation is more likely to pick up newer technologies and as they enter the workforce, we will start seeing the uptake increase.
- How has Covid19 lockdowns accelerated digital/online payments?
With the spread of the Covid-19 pandemic, cash is just not compatible with social distancing measures. It is very difficult to handle transports in a safe, hygienic fashion. And as such, many organisations have actively discouraged the use of cash payments in favour of digital payments.
Many people are also avoiding going to the store because of isolation and as a result we have seen a whole new market open up as people discover just how safe and convenient e-commerce can actually be. Now when trade restrictions were relaxed and e-commerce stores were able to trade again in non-essential goods, we have seen volumes of payments that we haven’t seen since Black Friday. And that just demonstrates the need for a safe, touchless payment mechanism and especially during a pandemic such as this.
- How does the Ozow platform work?
Ozow is an instant EFT services. It removes much of the friction of electronic fund transfers for customers and merchants alike. For our consumers, we provide an alternative payment mechanism to cards. For our merchants, Ozow provides a payment service for a far lower price than card payments and we lessen the reliance on cash from a physical perspective but also from a reconciliation burden on customers having to manually transfer funds to merchants. In a nutshell, Ozow makes payments with electronic fund transfers easier than paying with a card without compromising online security or the convenience of having instant payment mechanism and receiving your goods.
- How has Amazon Web Services help you deliver services and business objectives?
Amazon Web Services (AWS) have lessened the burden Ozow had on maintaining our own infrastructure. They also allowed us to scale up with ease during busy periods and handle massive volumes of transactions but we can also scale down in the quiet periods – and that’s important because you pay for what you use, so there’s quite a bit of cost savings involved there.
So, ever since we moved to AWS cloud infrastructure we have automated many tedious tasks. And by relying on their expertise in this area, in terms of running platforms, we have managed to keep downtime to a minimum and we’ve actually managed to speed up the performance of our software by tenfold in some cases.
- Who does your platform target?
We currently have a very diverse client base which includes the biggest players in the automotive industry, the largest e-commerce stores available in South Africa as well as Mom-and- Pop stores around the corner trying to sell their goods. So we want to allow those who have never been able to transact online to experience just how secure and convenient it can be. Being a small company ourselves, our heart is really in trying to empower the informal sector as well as entrepreneurs and SMEs and wanted them to be able to do business – and we try and promote that by giving back by making the first year of payments free. Obviously NPOs and NGOs will never have to pay to get paid.