FINANCE: Debit Cards Make Their Play
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, says South Africa is 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, fuelled 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 says one of the fastest growing retail segments for debit card purchases over the past year to June 2012 is fuel, with an increase of 150%. This growth is off a very low base. 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 says 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.”
He says 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.”
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