FINANCE: Debit Card Revolution In SA
Recent Western Cape Business News
Debit card usage is surging in South Africa as more people discover the benefits of debit and transaction fees drop.
Herman Botes, Director of Consumer Debit at Visa for Sub-Saharan Africa, said South Africa was undergoing a 'debit card revolution' with strong purchase momentum.
“Debit card usage in South Africa has risen 18% a year for the last three years, fueled by cardholders replacing cash with debit cards in their wallets.
“This growth is consistent with debit growth in other industrialised markets. Given that South African banks are offering debit cardholders most of the same loyalty and other benefits associated with credit cards, we expect to see this growth trend to continue.”
Botes noted that the one of the fastest growing retail segments for debit card purchases over the past year to June 2012 was fuel, with an increase of 150%. This growth was off a very low base, however, as fuel purchases on debit and credit cards were prohibited in South Africa until mid-2009.
“Debit card spending on clothing, food and beverages has increased by 19% over the past year. Visa has also noticed a significant uptick in online debit card transactions including purchases of airline tickets, books and music.”
Botes said that he is often asked whether debit cards can be used overseas.
“They certainly can. In fact, debit card usage is growing faster (13%) than use of other card types (9%) for international travel.”
Botes pointed out that some people still don't understand the range of benefits that debit cards offer.
“Many people think debit cards are just ATM cards to draw cash. In fact, using debit cards to make purchases offers cardholders faster transaction times, the convenience of not having to carry cash, easy record-keeping, safety and security, as well as a wide variety of other benefits. Visa Platinum debit cards, for example, offer free purchase protection insurance and an extended warranty on goods purchased.
“This means that Visa’s purchase protection insurance may cover the theft of your new computer. If your new TV breaks or malfunctions outside of a retailer or manufacturer warranty, Visa’s extended warranty benefit may cover the TV for up to two years after the date of purchase.”
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