The smartphone becomes our most beloved gadget according to the Mastercard Impact of Innovation study

September 27, 2016 ­— Some 95% of South Africans use their smartphone more than any other device, with nearly half of them using their mobiles as their primary device to access digital services. This is according to the findings from the Mastercard Impact of Innovation study[i], released on the sidelines of the Mastercard Innovation Forum 2016, which opened today in Budapest, Hungary with the participation of more than 500 attendees from Middle East and Africa, Central East Europe, Russia, Turkey and Ukraine. 

The Mastercard Impact of Innovation study surveyed 23,000 consumers in 23 different countries across Europe, Africa and the Middle East about their attitudes to digital technology. In South Africa, the study gathered data from over 1,000 internet users with bank accounts between the ages of 20 and 50.

It found that while in South Africa, 73% of respondents said they were ready to pay with their mobile phones, Western Europeans have some way to go – only two fifths (40%) said so. However, when asked about new ways to pay, consumers across all regions chose their smartphone as an alternative to the traditional card payments.

“Our study confirms that not only is there a huge appetite for new safe and smart ways to pay, but connected South African consumers overwhelmingly want to use their smartphones. In fact, many are ready to do so right now. For decades, card payments have been the only reasonable alternative to cash – but consumers are saying loud and clear that they want use digital innovations to meet their everyday needs – be it for transport, healthcare or payments,” said Mark Elliott, Division President, Mastercard, South Africa.

Consumers demand more innovation in crucial areas

Nearly 80% of respondents think digital innovations have a positive impact on society – while only 5% think digital innovations are having a negative impact.

Four out of five South African consumers also believe that digital services will be used by more people across more areas of life, with only 14% saying that digital services will remain the privilege of a minority in the future. They report that public education, public transport and public healthcare are the areas that should be prioritised for further digital innovation. On the other hand, digital solutions for networking or meeting people are considered to be overemphasized by more than a third.

The survey results also indicate that consumers who live in technologically less developed countries tend to be more enthusiastic about digital innovation than in markets where it is readily available. Western Europe has the largest ratio of those resistant to digital change (17%), while Central and Eastern European countries and those in the Middle East and Africa have the highest number who actively embrace new technology. More than a quarter in South Africa, Russia, Turkey and Ukraine call themselves ‘eager promoters’ of new technology.

Security a primary concern

While enthusiastic about innovation, South African consumers want security, especially when it comes to making payments. They unanimously agreed that bank account security is their absolute priority when it comes to digital payments, followed by the security of their personal data.

More than half of South African respondents (51%) said they would prefer to authenticate themselves with a fingerprint rather than a PIN when paying with a bank card. Although a low ratio claimed to use biometric authentication, more than two thirds consider these methods to be a safe way to make purchases.

“Consumers across South Africa seek faster, more secure and smarter methods of payment for an increasing array of transactions. As mobile technology and payments evolve, people expect technology to simplify the way they pay for goods and services. Putting identity verification at their fingertips makes it easier for consumers to complete secure transactions,” says Elliott.

South African highlights from the study include:

  • Banking: Mobile payment is used by almost a third (31%) of respondents. Nearly three quarters use online banking via web browser, and two thirds via mobile app.
  • Online Shopping: Some 75% of South Africans surveyed frequently shop online, with respondents highlighting convenience and time-saving as the biggest drawcards to this form of shopping. Lower costs, increased security and data protection as well as more affordable internet access are key to boost online shopping in South Africa.
  • Payment applications: Nearly 70% use payment applications, which are perceived as convenient by the vast majority of users. Less than a third had any kind of unpleasant experience. Non-users say their concerns around the safety of their bank accounts, and security of their personal data in payments applications are the biggest barriers to adoption.

Ends

Mastercard Impact of Innovation study – Key findings
Western Europe (France, Germany, Italy, Sweden and the UK) ·        Consumers in Western Europe tend to be moderate when it comes to digital innovation. Larger proportions of resistants’ (17%) are paired with a lower rate of ‘eager promoters’ (11%). The percentage of people ready to pay by smartphone is around 40%, however Sweden stands out – over 70% are ready. Western Europeans trust biometric authentication such as fingerprint (38%) more than they trust PIN (30%)
Central Eastern Europe (Austria, Bulgaria, Czech Republic, Croatia, Hungary, Israel, Poland, Romania, Serbia, and Slovakia)     ·         Central Eastern Europe occupies the middle ground in many aspects. With the highest rate of drifting followers’ (46%) similar to Western Europe, but with a much lower rate of ‘resistants’ (11%). Mobile payment readiness is 57%, and fingerprint authentication (37%) is trusted more than PIN (33%)
Russia, Ukraine, Turkey   ·         Regarding the further spread of digital services Russia, Ukraine and Turkey are the most positive: 4 out of 5 consumers think that they will be available for more people in the future. Mobile payment readiness is an average 64%, and this region boasts the highest number of ‘eager promoters’: an impressive 27%. People from these countries trust fingerprint the least – only 30% said so, but they still prefer it to PINs. SMS code leads with 40%. Demand exists for more innovation in automobile and transport industries.
Middle East & Africa  (Egypt, Kenya, the Kingdom of Saudi Arabia, South Africa and the United Arab Emirates) ·       Consumers in the Middle East and Africa are optimistic about the effects of digitalization and more open towards innovative solutions: Mobile payment readiness is the highest at 73% and the region has the highest ratio of enthusiastic followers (33%). People here do not generally trust PIN codes for payment (20%), however fingerprint enjoys more confidence (30%) and the list is topped by SMS code (40%). This region demands innovation in most areas: not only education, healthcare and transport, but also in commerce, finance, automobile, hotel and restaurant industries.

 

Notes to Editors

The Mastercard Impact of Innovation study looked into the perception of digitalization and its effects on society, personal preferences in using digital technology for payment, and payment authentication. It also showed how resistant or willing respondents were in accepting and actively using digital technologies.

[1]The survey was commissioned by Mastercard and carried out by IPSOS Research in the winter of 2016. The survey gathered data from internet users with bank accounts between the age of 20-50 in Mastercard’s 4 global regions: Western Europe (countries: France, Germany, Italy, Sweden, and the UK); Central Eastern Europe (countries: Austria, Bulgaria, Czech Republic, Croatia, Hungary, Israel, Poland, Romania, Serbia, and Slovakia); Russia, Turkey/, and Ukraine/; and the Middle East and Africa (countries: Egypt/, Kenya/, the Kingdom of Saudi Arabia, South Africa/, and the United Arab Emirates). In countries marked with / above, the survey is representative of Internet users, while in all the other countries the survey is representative of the whole population. Sample structure: N=1000 respondents per country, representative sample of 20-50 aged online urban population by gender, age and region. Methodology: online self-completed interviews via IPSOS access panel. Questionnaire: 20-minute self-completed online questionnaire.

About Mastercard

MasterCard, www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter: @MasterCardMEA and @MasterCardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the MEA Engagement Bureau.

Mastercard Communications Contact
Birgit Deibele, 071 464 0983, birgit.deibele@mastercard.com 

Kim Kruger 082 774 1232, kim@ideaengineers.co.za