Examining the influence of digital payment adoption on the digital divide in Kagiso township, South Africa

Abstract

Digital payment systems have become increasingly popular and a vehicle for financial inclusion and access to financial services. However, as technological advancements progress, there remains a population segment that is left behind in terms of adoption and access. Digital payment systems are generally not adopted by township residents in South Africa. This is due to the uneven telecommunications infrastructure in South Africa and its limited availability in the townships. This study investigates the influence of tap-to-pay digital payments on the existing digital divide in Kagiso township and the factors that impact adoption and usage of this technology. This study adopted a qualitative research methodology that involved conducting face-to-face interviews with 12 respondents from Kagiso township. The respondents’ feedback was consolidated and analysed to uncover key findings. The findings revealed the presence of a digital divide in access and availability within Kagiso township, characterised by challenges stemming from poor infrastructure and limited access to technology, worsened by an uneven distribution of ICT. Furthermore, this study revealed lack of awareness and understanding of tap-to-pay, safety and security, unemployment and socioeconomic challenges as significant barriers to the adoption and usage of tap-to-pay payment systems in the township. Therefore, it is advisable for the South African government to increase investment in infrastructural upgrades to improve the accessibility and availability of digital technologies in the townships while also collaborating with the private sector to support initiatives aimed at addressing the digital divide in the townships. The collaboration with the private sector, particularly the telecommunications companies is crucial in driving these efforts. By leveraging market opportunities, telecommunication companies can implement strategies that accelerate the adoption of new technologies. One such strategy is investment in fiber optic networks to provide high-speed internet access in townships.