Browsing by Author "Tshishonga, Aluwani Peter"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    Financial inclusion through digital payments in South Africa
    (University of the Witwatersrand, Johannesburg, 2023) Tshishonga, Aluwani Peter; Ndayizigamiye, Patrick
    One of the enablers of financial inclusion is access to payment services and digital payments have been proven in other countries to be one of the enablers of financial inclusion. Cash payments are prevalent in many communities in the country However, those using cash are not included in formal financial services and are not able to get services such as credit, insurance and other financial services products. This study sought to identify the challenges that should be addressed in order to use digital payments as enablers of financial inclusion in South Africa. It also sought to identify the solutions or frameworks that could be used to address these challenges. The Actor-Network Theory was used to identify the actors in the digital payments ecosystem and the challenges they face. The research findings show that the South African economy can be referred to as a “dual economy”. The rural economy relies heavily on cash while the urban economy uses formal banking services, which include digital payments. Amongst the challenges affecting the adoption of digital payments are the immediacy of cash and the perceived low cost of cash, the low acceptance of digital payments by merchants’ infrastructure and, in some instances, those who are willing to pay using digital means are charged more to cover the costs merchants incur when accepting digital payments. A further challenge is the rate of digital literacy in the country and the lack of trust in the digital payments ecosystem. The cost of date in South Africa limits access to internet connectivity which is required to make digital payments. There is a lack of interoperable solutions in the market whereby customers can move from one channel to another with ease, for example, by using a mobile money wallet in the same way a bank account can be used. Lastly, the lack of privacy in transactions was also identified as a challenge. While there may be several solutions for these challenges, this research established the following potential solution, namely, the creation of a new industry body that includes all actors in the digital payments ecosystem. Mobile network operators, financial technology companies and retailers, amongst others, need to participate in this new industry body in order to help address the identified challenges. The new industry body must also assume the task of increasing digital literacy in the country and improving the infrastructure required to support digital payment