South Africa sees financial inclusion on the horizon

South Africa is in a ‘Transitioning’ stage in driving both payments adoption and usage through private and public partnerships, according to the “A Progressive Approach to Financial Inclusion” Report issued by MasterCard. A ‘Transitioning’ country displays a penetration of payments products at a rate of more than 50% but less than 75%, according to the researchers’ metrics.

The country is on the same progression towards financial inclusion as Russia, Italy, Poland, Brazil, China and Malaysia, displaying alignment with three of its four BRICS partners. With 67% of South African adults owning a payment product, only 6% of consumer purchases are non-cash despite just over half (51%) of adults receiving money via non-cash means (i.e. electronically). This means that while South Africans receive a large percentage of their income via electronic payment methods, they are not using their electronic payment products to transact because they are still depending on cash to do so.

However, financial inclusion is a progressive measure, with payments as the optimal entry point. In almost all the African countries studied, payment product adoption exceeds the adoption of the other products studied, although local factors affect the different products in different ways.

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