South Africa’s big-four banks are anticipating a significant uptick in digital transactions during the busiest shopping period of the year, as local consumers plan to splash out on Black Friday and Cyber Monday deals.
Many retailers have introduced extended periods to run their discounts the entire month of what some have dubbed ‘Black November’.
Absa, Standard Bank, Nedbank and First National Bank expect significant growth in digital purchases on 26 November, compared to last year’s Black Friday.
With Black Friday once again falling over the lockdown period, consumer and retailer behaviour has significantly altered, signalling a shift in how people will transact during this week’s shopping extravaganza.
Banks believe consumer sentiment and spending patterns will continue to reflect the country’s steady economic recovery, following the dismal impact of the COVID-19 crisis.
Online spending is already showing signs of improvement as consumers’ buying power steadily improves. This is mainly as result of the easing of lockdown restrictions leading to an improvement in SA’s economy.
Another factor is the increase in the number of customers adopting and embracing digital transactions as they seek safer, more convenient ways of transacting, while avoiding in-store overcrowding, note the banks.
Absa says it has witnessed a 231% increase in contactless card volumes across debit and credit cards this year.
“Following record increases in e-commerce levels in 2020, Absa has noted drastic payment shifts this year. New payment alternatives, including QR payments and digital tap-to-pay options such as Apple Pay, Garmin Pay and FitBit Pay, are also making a mark,” says Cowyk Fox, managing executive: everyday banking, Absa Retail and Business Bank.
“While e-commerce (card-not-present) transactions increased exponentially last year as South Africans came to terms with the pandemic, this came off a low base. Following last year’s 200% increase in e-commerce, card-not-present growth has now normalised. This Black Friday period, we expect e-commerce levels to remain in line with the 35% increase noted for the year.”
Ashley Saffy, FNB Card business development head, says the FirstRand-owned bank has seen significant growth in contactless device payments (FNB tap-to-pay and digital partner wallets) and she expects this trend to continue over Black Friday.
“We expect online shopping to grow by 15% this Black Friday, based on the easing of lockdown restrictions and the significant growth seen in spending with our online retail partners throughout the year.
“Regarding contactless device payments, we forecast that this will more than triple compared to Black Friday in 2020, and we expect double-digit growth in contactless card volumes.”
Physical vs virtual
According to BankservAfrica’s recent point-of-sale and ATM data, though it is uncertain whether this year’s spending will return to pre-pandemic levels, Black Friday sales performance is predicted to outdo the levels in 2020.
In November 2020, the spending was R54.8 billion in real terms, compared to the R60.5 billion in November 2019, according to BankservAfrica.
Mpho Sadiki, head of function: trading products and solutions at Nedbank, comments: “We are expecting to see a continued trend during the Black Friday sales period increasing year-on-year, with Friday, 26 November and Monday, 29 November (Cyber Monday) being the peak trading days for the month of November.
“This is due to improved consumer spending patterns and trends, and fewer trading restrictions when compared to November 2020, growth in digital payments and e-commerce retailers, as well as improvements in South Africa’s GDP.”
Nelisa Zulu, Standard Bank head of card and payments South Africa, says based on its digital transactions history, the bank has witnessed a good recovery since the beginning of 2021.
“In 2020 and continuing into 2021, we have seen an overall increase in card-not-present spend, as clients shift behaviour towards more digitally-enabled shopping. From a behavioural perspective, we anticipate there may be some spend mix shifts between online and physical spend due to the relaxed lockdown levels and vaccination progress. We anticipate that people would step out to enjoy the physical shopping experience.”
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