Faculty of Commerce, Law and Management (ETDs)

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    Factors influencing Fintech adoption among the unbanked in South Africa
    (University of the Witwatersrand, Johannesburg, 2024) Matsimbi, Kagiso Hetisani; Totowa, Jacques
    Financial technology (Fintech) has emerged as a transformative force in the global financial landscape, promising increased accessibility and efficiency in financial services. However, its adoption among unbanked populations, particularly in South Africa, remains limited, posing a significant barrier to financial inclusion and economic empowerment. This study explores the factors influencing the adoption of Fintech among unbanked South Africans, with a focus on accessibility, trust, technological literacy, user interfaces and socio-economic barriers. Through an exploratory approach, in the form of semi- structured interviews, data was collected from market research professionals with extensive research experience in the financial services and Fintech industry. The findings reveal that while there is a growing awareness of Fintech services, several key factors hinder widespread adoption, including limited digital literacy, concerns over security and trust, and challenges related to accessibility and affordability. Additionally, socio- economic factors such as income levels, infrastructure and geographic location play a significant role in shaping adoption behaviours. Based on these findings, recommendations are proposed to enhance digital literacy, increase accessibility, build trust in Fintech services, simplify user experience, tailor financial products, and foster community engagement to encourage adoption. Addressing these factors is essential for unlocking the potential of Fintech to drive financial inclusion and empowerment among unbanked South Africans, ultimately contributing to broader socio-economic development goals.
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    Perceived impact of fintech on financial inclusion in South Africa
    (University of the Witwatersrand, Johannesburg, 2021) Runyowa, Leonard; Chakamera, Chengete
    Globally, financial inclusion has been recognised as a critical pillar to alleviate poverty, reduce inequality, and increase economic growth. As an emerging economy, South Africa is still facing challenges of poverty and inequality and is ranked one of the unequal countries in the world (World Bank, 2013). Financial inclusion by leveraging fintech has been identified as a critical enabler for delivering affordable financial services to under-served population segments (National Treasury, 2020). The primary purpose of this study is to determine the perceived impact of financial technology on financial inclusion in the South African context. The study's specific objectives are (i) to determine if the adoption and usage of fintech influences financial inclusion in South Africa; (ii) to determine if fintech can influence financial inclusion barriers and (iii) to determine if awareness of the benefits and risks associated with fintech influence the adoption and usageof fintech. The study used a quantitative research strategy with a cross-sectional or survey design. An online self-completion questionnaire was used as a data collection instrument and non-probability sampling with convenience sampling method to select the respondents. One hundred twenty-five respondents completed the online survey, and data were analysed using descriptive statistics, correlation, and regression analysis. The findings indicate that fintech adoption and usage has a positive influence on financial inclusion. The study also found that fintech influences financial inclusion barriers like distance to the nearest branch, transport costs, transaction costs, and lack of proper documentation. Consumers who use fintech products and services no longer perceive these barriers as a hindrance to financial access. Lastly, it was also found that awareness of the benefits associated with fintech influences fintech adoption and usage. In contrast, awareness of the risks associated with fintech does not influence fintech adoption and use among the respondents. This study will contribute to the fewer studies that have looked at the impact of fintech on financial inclusion in the South African context. The study can help the government and financial institutions understand the impact of fintech on financial inclusion and improve the current strategies implemented to increase financial inclusion in South Africa
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    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
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    Consumer acceptance of fintech services in the South African banking sector: a COVID-19 context
    (2022-02) Magagula, Nothando Linnet
    This study explores the consumer acceptance of fintech services in the South African (SA) banking sector, focusing on the COVID-19 context. The conceptual framework used in the study is the Technology Acceptance Model (TAM), which considers factors such as perceived usefulness, perceived ease of use, and behavioural intentions and other adopted factors from previous literature such as Perceived Risk, Trust, User Innovativeness, Perception of COVID-19 and Fintech Acceptance. The research aims to understand the extent to which consumers are willing to adopt fintech services by identifying the relationship between behavioural intention and other factors influencing their decision-making process. The study draws on primary and secondary data sources to provide insights into consumer fintech acceptance and adoption during the COVID-19 pandemic in the South African banking sector. After conducting empirical research, a convenience sample of 156 South African banking customers participated by completing an online survey shared on various social media platforms. The data collected was analysed using Structural Equation Modelling in AMOS software. The main findings of this study reveal that behavioural intention has a positive relationship between these five factors, namely, perceived usefulness, perceived ease of use, trust, fintech acceptance and user Innovativeness; this suggests that these factors are significant in measuring consumer acceptance of fintech services in SA banking. However, the perception of COVID-19 and perceived risk were found to be insignificant measures based on the data collected. This study aimed to understand the consumer acceptance of fintech services in SA banking consumers during the COVID-19 pandemic however, it does have some limitations due to the method of collection used and the targeted population. The study concludes by offering recommendations for banks to enhance their offerings and increase consumer acceptance and adoption of fintech services.
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    A conceptual framework for the South African fintech ecosystem
    (2021) Masangwana, Vuyelwa
    The term ‘ecosystem’ is synonymous with multi-company dynamic teamwork and a new way of organised economic activities. It is thus important to understand the modes of interaction among the heterogeneous actors in the ecosystem. Financial Technology (FinTech) became prominent after the financial crisis when the financial industry's role in economic growth became a global concern. Many FinTech companies were established by bankers who found themselves unemployed after the financial crisis and found creative ways to use their skills in financial services. The purpose of FinTech companies in the economy became pre-eminent due to their ability to reduce economic risks and costs through innovation. It also became clear that FinTech would benefit the financial system due to its efficiency in addressing transaction costs, information asymmetry and in addressing issues of taxation. No market player can afford to operate in a silo in the digital age, as collaboration and partnerships are more critical than ever. According to the IMF website (2020), South Africa is a dual economy and has one of the highest inequality levels worldwide. According to a Business Technology article published in 2019, there is still an untapped consumer opportunity, as there are nearly 1.2 billion people globally who do not have bank accounts. South Africa has a large unbanked or underbanked population, estimated to be about 11 million people. A healthy FinTech ecosystem will develop in South Africa if there is an improvement on barriers to entry and a better understanding of the consumer. The study aimed to establish whether the existing FinTech ecosystem models are suitable for the South African context and identify any discrepancies and similarities between developed and developing world FinTech ecosystem models. Qualitative research in the form of semi-structured interviews was conducted. The sample included 12 executives from South Africa who represented entrepreneurs and start-ups, policymakers and financial institutions. The sampling technique was purposive in nature, and it was chosen because of its convenience. The study found that an additional function of funding must be explicitly specified as a government role in the South African context. In addition, the study revealed that in the South African sense, customers must be segmented further to include the unbanked and underbanked market. There is no existing FinTech ecosystem model for South Africa, and this study has developed a model that suits developing countries, specifically South Africa. Finally, the study ii uncovered that incubation and mentorship are essential components of the FinTech ecosystem in South Africa. The study will assist policymakers and other FinTech ecosystem players to gain a better understanding of their roles and how they can contribute and collaborate to make the FinTech ecosystem a success. The study will also aid policymakers and FinTech companies to focus on consumers and help policymakers consider some of the frustrations that participants have raised about policies. It will further assist them in FinTech policy formulation and amendment of the existing or the creation of new policies and legislation.
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    Conceptual framework for the South African FinTech ecosystem
    (2021) Masangwana, Vuyelwa
    The term ‘ecosystem’ is synonymous with multi-company dynamic teamwork and a new way of organised economic activities. It is thus important to understand the modes of interaction among the heterogeneous actors in the ecosystem. Financial Technology (FinTech) became prominent after the financial crisis when the financial industry's role in economic growth became a global concern. Many FinTech companies were established by bankers who found themselves unemployed after the financial crisis and found creative ways to use their skills in financial services. The purpose of FinTech companies in the economy became pre-eminent due to their ability to reduce economic risks and costs through innovation. It also became clear that FinTech would benefit the financial system due to its efficiency in addressing transaction costs, information asymmetry and in addressing issues of taxation. No market player can afford to operate in a silo in the digital age, as collaboration and partnerships are more critical than ever. According to the IMF website (2020), South Africa is a dual economy and has one of the highest inequality levels worldwide. According to a Business Technology article published in 2019, there is still an untapped consumer opportunity, as there are nearly 1.2 billion people globally who do not have bank accounts. South Africa has a large unbanked or underbanked population, estimated to be about 11 million people. A healthy FinTech ecosystem will develop in South Africa if there is an improvement on barriers to entry and a better understanding of the consumer. The study aimed to establish whether the existing FinTech ecosystem models are suitable for the South African context and identify any discrepancies and similarities between developed and developing world FinTech ecosystem models. Qualitative research in the form of semi-structured interviews was conducted. The sample included 12 executives from South Africa who represented entrepreneurs and start-ups, policy makers and financial institutions. The sampling technique was purposive in nature, and it was chosen because of its convenience. The study found that an additional function of funding must be explicitly specified as a government role in the South African context. In addition, the study revealed that in the South African sense, customers must be segmented further to include the unbanked and underbanked market. There is no existing FinTech ecosystem model for South Africa, and this study has developed a model that suits developing countries, specifically South Africa .Finally, the study uncovered that incubation and mentorship are essential components of the FinTech ecosystem in South Africa. The study will assist policymakers and other FinTech ecosystem players to gain a better understanding of their roles and how they can contribute and collaborate to make the FinTech ecosystem a success. The study will also aid policymakers and FinTech companies to focus on consumers and help policymakers consider some of the frustrations that participants have raised about policies. It will further assist them in FinTech policy formulation and amendment of the existing or the creation of new policies and legislation