The shift in consumer behaviour, and what this means for the future of online payment in SA

November 24, 2021

Rapid Growth in Online Payments

South Africa’s online payment revenue grew by 66% from 2019 to 2020, well above the global average of 26%. We have seen how quickly South African consumers have adapted from a somewhat hesitant audience to regular users of online payment. As a result of shifted consumer behaviour, eCommerce is expected to grow by 150% by 2025.

The rapid increase in eCommerce has subsequently sparked greater uptake in digital payments like Zapper, SnapScan, and various buy now pay later platforms. Digital payments are expected to grow by 9% until 2025, with 34% of the users between 25-35 years of age.

According to the World Bank, the percentage of internet users in South Africa has grown from 10% in 2009 to 68.2% in 2019, however stable connectivity remains an issue. ICASA recorded that smartphone usage has increased from 44% in 2016 to 91% in 2019; creating valuable potential for mobile commerce.

At Transaction Junction, we are excited to experience the growth of eCommerce first-hand. As the leading payment processor in South Africa, we ensure that online payments are processed seamlessly and securely, and we provide intuitive back-office analytical and reconciliation tools.

Online payment

“I’d like to compliment the Transaction Junction eCommerce team for the excellent service they provided us. Putting our clients’ needs first separates them from the rest. They provided our clients with a tailored solution, and enhanced their online payment infrastructure. Such a commitment to be client centric is to be commended. They also provide continuous support with quick query resolution – thank you.”

Charmaine Muntingh, Manager: Acquiring Sales at Nedbank

Whilst the current reality is that eCommerce comprises of a small piece of the total retail value in South Africa, the market signals are all pointing to continuous and rapid eCommerce growth. The barriers to growth are being removed quickly and surely, and online retail has earned the trust of South African’s who are acutely aware of cyber-crime, improving in the willingness of South Africans to adopt shopping online and making online payments.

“One might say that the purpose of business strategy is to identify trends and market signals, and find ways to negate weaknesses and leverage strengths for long term growth. The trends and market signals paint a very clear picture. While GDP remains below inflation, our eCommerce industry is growing by (high) double digits each year in South Africa. Smartphone penetration has just about reached a point where almost all people with disposable income are online. The last mile logistics industry has matured significantly over the past 5 years, making it easier and cheaper to deliver goods and services.”

Jonathan Luies, Head of eCommerce, Transaction Junction

Online Payment Insights

According to “Think with Google” these are some of the main insights into the changes of South African eCommerce consumer behaviour in recent years:

1. More buying decisions are made online, and more shoppers are using multiple channels

South African’s have been showing a greater uptake in using multiple online channels before making a decision to purchase, specifically through Google Search, Ads and videos.

This is a signal for eCommerce businesses to focus more on online ads and online marketing, and ensure their online strategy is aligned across all channels for a unified omnichannel experience.

strong growth in channel agnostic purchase preferences
image: Google Insights. The above diagram graph shows a consistent drop of shoppers who always buy from brick-and-mortar stores, a consistent increase of shoppers who purchase from multiple channels, and a slight increase in shoppers who always or mostly purchase online.
2. Shopping apps are gaining popularity

In 2020 it was recorded that 35% of SA smartphone owners have shopping apps installed on their smartphones, a 5% rise from 2019. Whilst mobile web online payments still outweigh mobile app shopping payments, the steady increase of the installation of mobile apps, showcases the need for an omnichannel experience.

eCommerce businesses should focus more on promoting their apps for installations. Conveniently people always have their phone by their side, a great channel for mobile marketing.

3. Loyalty is not guaranteed as consumers are willing to try new brands

According to Google Insights, the most important factor in making a decision to purchase is convenience (40%), price (39%), and stock availability (33%) were at the forefront of purchase decisions, with speed (41%) being the most important factor of all. Consumers will purchase from the brand that offers this.

South Africans are price sensitive, often do online research for the best deal, and favour online promotions and coupons. Price plays a significant role between closing or loosing a sale. Keep an eye on your pricing, as well as competitor pricing. Where possible, offer deals, discounts, coupons, free delivery to help close the sale.

Of course, all the basic issues need to be addressed:

  1. A long or complicated checkout process
  2. High delivery fees / a slow delivery waiting time
  3. An unsafe looking website
  4. Unclear pricing
  5. Not offering the online payment method of choice
revenue share payment types south africa
The above chart shows the eCommerce revenue percentage by payment type over the years. Card payments take a consistent first prize, with eWallets showing an increasing second.

Sucessful eCommerce businesses

Globally, 7 out of 10 of the most successful businesses are based on an online platform and 30% of global economic trade is expected to come from online platforms in the next 6 years. eCommerce businesses need to think beyond their channels and tactics, they need to think about the bigger picture, with one of the most important questions being: “how do I maintain an amazing consumer experience all the way to the customer’s door, and beyond?” Two businesses that have done this particularly well in South Africa are:


Takealot, launched in 2011, is the largest eCommerce business in South Africa. By the end of 2019, 2 500 third party businesses were selling through Takealot, to the 1.8 million Takealot shoppers. They were also the first retailer to adopt Black Friday in South Africa and the first retailer to accept Bitcoin as an online payment! Although they are an eCommerce business, they have Nationwide pick up points, reaffirming their mission of customer centricity. Takealot started with a mission in mind: “To be the largest, simplest, most customer-centric online shopping destination in Africa.” Takealot has achieved this with flying colours.

Checkers Sixty60

The Sixty60 app, launched in 2019 offers a 60-minute delivery for Checkers supplies, and has shaken the eCommerce and FMCG space. As the first to market for a platform this size, it has forced other FMCG retailers to ramp up their eCommerce and logistical operations to reach the consumer expectations set by Sixty60.

At Transaction Junction, we constantly innovate to improve the experience for our customers and theirs. We understand the ever-changing consumer demands and expectations, and go above and beyond to surpass this. We are obsessed with payments, of all types, and our signature is a sleek and seamless payment experience.

At Transaction Junction we think ahead, get in touch