Stitch Business Development Manager Taariq Tayob shares more on how businesses can leverage Stitch CashPay to reach more customers and simplify reconciliation.
Although it’s estimated that around 85% of South Africans have a bank account, BankservAfrica estimates nine out of ten transactions are still made in cash. Survey data from popular South African banks echo these statistics, with customers indicating they still withdraw cash at least once a month to use for day to day payments.
At Stitch, we recently carried out our own survey and published a report on Consumer Payments Preferences on cash, uncovering reasons why many consumers still choose to pay in cash, whether the ability to pay in cash would influence their adoption of digital solutions and more.
Reasons for cash preference range from convenience and safety, to lack of access to digital methods, to concern over high fees associated with some digital payments. The data speaks for itself; while adoption of digital payment methods is growing, many South Africans are still very reliant on cash.
However, for those that prefer cash payments, their ability to engage with digital products and services is hindered, acting as a further barrier to financial inclusion in the country. For businesses, this means lower potential reach.
We created CashPay to give consumers more choice in how they wish to pay, enabling them to access digital products and services via cash payments, at ATMs or retailers across South Africa.
While there are other existing solutions, like vouchers, that enable consumers to use cash payments to access some digital channels, 57% of customers we surveyed indicated they’d had negative experiences with the method.
When asked whether they would prefer to top up their digital accounts using cash if that were an option, an overwhelming 96% of respondents said they would, indicating a significant opportunity for greater reach and strong demand for access to cash payment options.
With CashPay, tasks like making a deposit into a wallet-based app, or purchasing transport tickets, can be carried out at the same time as a grocery purchase and paid in cash at the same till. Funds paid are instantly allocated to a customer’s digital account, and businesses enjoy seamless reconciliation on the backend.
With CashPay, businesses can significantly expand their reach and:
Virtually any business that accepts digital payments can benefit by offering their customers the option to pay in cash.
E-commerce businesses can easily enable consumers to perform online payments using cash at checkout.
Lindsay Lehr, Managing Director at Payments and Commerce Market Intelligence - a company dedicated to helping the world’s top payments and tech companies make strategic payments decisions backed by data - revealed that e-commerce is growing faster today among non-credit card holders.
This exemplifies a consequential opportunity for e-commerce businesses to reach and retain a large group of consumers, enabling them to not only expand reach, but also to offer a unique online + offline shopping experience.
Wallet-based trading or financial services apps
Wallet-based trading or financial services apps can allow customers to make easy deposits with cash when topping up their digital wallets.
Through our survey, we found that of those who do not currently invest in cryptocurrencies, for example, 56% indicated they would consider investing if they had an option to make deposits using cash. This represents a significant missed opportunity to reach this currently underserved base.
Similarly, an overwhelming 86% of respondents who do currently invest in cryptocurrencies indicated that if they could make deposits using cash, they would prefer this method, highlighting an opportunity to better serve this market and potentially increase the frequency and rate of deposits.
Insurance businesses can easily collect and attribute premiums in cash.
Despite the fact South Africa’s insurance penetration appears high, with the FSCA indicating some 60% of the population report having an insurance product, the majority of this accounts for funeral cover. Excluding this, only around 19% of South Africans hold other insurance policies. The biggest barrier for underserved populations centres around affordability, but more convenient payment methods - like cash - have the potential to remove some barriers to payment for many South Africans.
Find out more about how Stitch empowers insurance businesses to power instant claims settlements with Stitch Payouts.
Transport businesses can allow passengers to purchase tickets at retailers in cash.
Enabling travellers to pay for items like bus tickets, for example, in cash offers a highly competitive advantage in a saturated market. Many operators rely on voucher solutions, or need to rely on their drivers to collect cash payments. This can be unreliable and cumbersome for both businesses and consumers, and often present challenges with reconciliation.
Cash-based payments offer a means to attract and retain a wider customer base, with a far smoother customer and reconciliation experience.
Here’s how CashPay works:
What sets Stitch CashPay apart is that it enables businesses to reconcile cash payments along with other payment methods, and instantly attribute payments to an individual’s account. This means that businesses can track all payment methods in one place, simplifying their reconciliation process.
Additionally, CashPay is available through the current Stitch integration, making it easy for businesses to add it to their payment options.
As more businesses embrace digital innovation, the ability to ensure that consumers are empowered with equal access to products and services will enable more businesses to stand out amongst competition and bring more customers into the digital economy.