They’re misaligned with how customers live and shop and pay, particularly in mobile-first markets like South Africa and the broader African region.

A region that is anticipating growth of 18.1% over and that craves the ingenuity and value brought by mobile-driven rewards, gamification incentives, cashbacks and deeper financial inclusion.

Loyalty remains a key driver of customer engagement, but the traditional machinery that drives it no longer makes sense.

Retailers are often left carrying the weight of contingent liabilities for points that may never be redeemed, while customers are still trying to manage physical cards.

Traditional programmes are often fragmented, and many over-emphasise basic discounts and points while not really leveraging the data they gain to deliver true customer personalisation journeys.

The result is poor differentiation and engagement, even when membership numbers are high, and this dissatisfaction has seen a gentle side shuffle away from plastic cards and complicated systems towards an ecosystem-based approach to loyalty.

Partners, cross-brand earning, communities and interchangeable rewards across platforms and companies are taking their place. And these capabilities are being largely driven by an old technology on the block – blockchain.

Web3 and blockchain have been around for a while and are changing the physics of loyalty in ways that simplify the process for consumers and retailers alike. Instead of points sitting dormant and creating long-term liabilities for retailers, their value becomes tokenised.

These points can be instantly transferred, redeemed and earned and work at the point of customer decision-making. It’s loyalty at the edge.

Web3 allows retailers to apply instant, per-consumer-centric rewards at the point of transaction on such a granular level that two customers standing at neighbouring tills can receive personalised offers in real time based on who they are and how they shop. Blockchain handles the trust.

There are no next-day reconciliations or batching or waiting to see if loyalty data matches what the till saw.

Instead, payments and settlements are one and the same and take place at the exact moment of purchase, even when multiple parties have to be paid out at the same time. In traditional systems that level of coordination is impossible.

This real-time flow also removes the financial drag that comes with loyalty programmes. Contingent liabilities clog up accounting systems and create long-term risk, which is frustrating, especially when retailers can see the potential value of a smooth loyalty programme in building customer loyalty and retention. Web3 and blockchain remove this structural weight by building digital rewards that behave like currency and that can be settled, issued and redeemed instantly.

Adding even more value is the fact that these technologies are redesigning the economics of payments. Card transactions cost money in merchant fees, but imagine if retailers could avoid those fees? Web3 wallet payments bypass old cost architectures which means money saved can be reinvested back into consumer rewards or returns on investment.

Loyalty then stops being a cost centre and becomes a proper engine for growth, one that’s funded by the infrastructure that enables it.

Another huge benefit for retailers is that all the data and insights are sitting in a digital repository ready to be interpreted into personalised consumer journeys that deliver value. Imagine not serving a customer baby food adverts long after their child has finished school?

Or not targeting consumers with products they no longer buy? Web3 gives retailers the ability to sit inside the data so the consumer’s advertising journey is matched by their life one.

This value stretches beyond corporate retail and into spaza shops, taxi associations and informal traders who can now capitalise on loyalty programmes because blockchain levels the playing field. The same rails that handle enterprise customers can hold micro-merchants as well.

This is the new era of loyalty, which is fast and fluid and interoperable at scale. Blockchain and web3 are rewriting how retailers talk to consumers and finally getting loyalty to move at the same speed that customers expect.

According to the Ecentric Payment Systems’ Black Friday Index 2024, the four-day Black Friday to Cyber Monday window punched well above its weight with online transactions jumping from 7.9% to 10.3% – a 30.4% increase – while in-store revenue more than doubled to 11.1%.

The shape of the event has changed from a vague outline of some stores offering discounts to a firm discount buster with extraordinary sales volumes.

Globally, Black Friday has become an almost month-long experience, something that has already started in South Africa, with Black November bringing promotions throughout.

But these tend to be the start of the tail that leads to the weekend itself, where, as the report found, shopping has become concentrated over four days, whereas in the past, shopping would continue well into December.

For the first time, the peak moved from early December, and the strongest returns were felt over the weekend.

This was a global trend as well. Shopify merchants alone processed more than $11.5 billion over the Black Friday weekend at a 24% year-on-year increase, and according to Adobe Analytics, Black Friday sales were up to $10.8 billion from $9.8 billion in 2023.

Shoppers are saving their big-ticket purchases for that late November window and holding back on discretionary spending until the deals drop.

Yet the numbers only tell a part of the story. What made 2024 distinctive wasn’t just the scale and timing of spending, but the ways in which consumers chose to shop.

Mobile devices have become the most popular storefront with millions of consumers transacting on their phones while on the move.

At the same time, physical stores showed they could still pull in the crowds if they offered something beyond discounts. Festive atmospheres, interactive demonstrations and exclusive in-store promotions gave shoppers reasons to queue.

This resurgence of in-store retail in South Africa is particularly interesting. Ecentric’s Index showed that in-store revenue over the Black Friday weekend more than doubled its share of the holiday total.

It suggests that while online convenience is still a winner, South Africans are enjoying the energy of a shopping trip when the experience feels worthwhile.

The rules of engagement are slowly changing. Mobile has to be rapid and easy with payment systems that can handle the extraordinary loads. Customers don’t want to lose deals because a payment system fails or websites can’t handle the load. This does leave a bad taste, and customers are vocal about disappointing experiences or the perception of false advertising.

In-store experiences have to be equally smooth and satisfying. Sure, there will be queues, but let these be accompanied by working systems and easy access to stock and unexpected experiences.

Black Friday in 2025 is going to be as much about consumer delight as it is going to be about deals and discounts.

Customers also don’t see Black Friday as a novelty anymore. It has to work hard for its money.

Flexible payment options are expected to become more popular, so price-sensitive consumers can benefit from the deals but stay within their budgets.

Personalisation, powered by AI, is also going to get sharper and more effective with tailored promotions sent to devices in real time.

This year, intelligent tech, smart payments, faster checkouts and bigger deals are going to lead the way, but they will be supported by immersive experiences, deeper personalisation, and more excitement as retailers build on last year to create something completely transformative.

South Africa’s interest in Black Friday has been higher this year than during any of the three prior editions, according to research from the Bureau of Market Research.

Over and above this, a recent news article said the annual discount bonanza would boost the economy to the tune of R88bn, comprising what its source says includes R22-billion from direct retailer revenue, R28-billion in indirect economic impact, R32,1-billion from the wholesale sector and an another R6,2-billion in fuel sales.

That’s a lot of payments in a fairly short period. Black Friday is no doubt a highlight of the retail calendar. However, it is no longer a day.

In many cases it has expanded to Black November. Beyond this, looking at trends in the sector, there’s a spillover now between November and the classic festive season.

This means that the last quarter – especially for retailers selling bigger ticket items such as appliances – is a peak period where under-pressure consumers are waiting for the end of the year to look for bargains, either in the form of Black Friday deals or Christmas specials.

This bottleneck puts pressure on retailers to carefully manage an array of moving parts, all while trying to uphold a positive customer experience.

In a dynamic retail environment, with so many considerations from supply chains to fulfillment, an omnichannel payment platform managed by a specialist partner shouldn’t be one of the things stressing retailers.

It should already be fully under control, freeing the business to work on its business: delighting customers so it sells more inventory.

Imagine the following scenario, which is a real-world example: Someone goes online and sees a good deal for a dishwasher. It falls within a set budget and so the customer makes an online purchase.

The customer, who doesn’t live in one of the major hubs, accepts that delivery will take a week or more. If the payment doesn’t work, the customer can, and will, go elsewhere. Game over.

However, in our scenario, payment goes smoothly. Then, just before the item is meant to be delivered, the customer is contacted and told the business cannot fulfill the order as there is no stock.

The customer is offered a credit or a refund, which is extra admin. If refunded, when will he get his money? And what if he does not want credit on his account because he is irritated with the retailer? In this scenario, which did in fact happen, the customer was so disappointed he vowed never to support the retailer again.

It is clear that payments are fundamental to customer experience, and why that aspect needs to run efficiently, because retailers have far more to consider.

Stock issues happen, we all know this. The customer in our scenario, who is a reasonable person, knows this too.

However, he was angry because the communication was not timeous, and he was not given other options. It is entirely conceivable that had the retailer made other options available in lieu of being unable to fulfill the order, the customer may well have decided to top up the payment with a few hundred rand and choose another brand.

He would have remained a customer with a good experience, feeling that the retailer was both transparent and making an effort to attend to his needs.

During peak periods such as Black Friday or the festive season, customer experience is, arguably, even more important than during normal periods.

Besides the increased volumes, the actual discounts are a great opportunity to bring new people into the store or onto the ecommerce site.

This means that beyond margin pressures for retailers, they face the risk of customer blowback because of increased demand on the value chain.

And so, all through the year and especially during peaks like Black Friday, retailers need to be able to pre-empt stock demand, manage the supply chain accordingly, monitor real-time data to make adjustments as needed, and – importantly – provide alternative options for customers. If there’s no stock, the retailer must know this in real-time and give the customer a plan B.

There needs to be a strategy to retain the sale, and even possibly upsell. This is especially true with big ticket items because they’re not impulse buys but a conscious purchase decision resulting from a need and the means to afford one.

This concept is taken further – a conscious and planned decision to buy a TV may well be followed by an impulsive decision to add a sound bar because it is presented as a good special, and is related to the primary purchase.

The customer journey is crucial. Businesses already know this, and the ones that fare better have invested in good technology platforms to continually improve the customer experience. However, underpinning an improved customer experience strategy is a seamless, reliable, omnichannel payments ecosystem.

Payments are one of the key areas of friction and potential breakdown in the customer experience or value chain.

If a customer cannot pay because his card does not work, the bank is not available or the website is down… that sale is lost. This is a basic housekeeping, hygiene factor.

Businesses have so many other things to consider, such as delivery times, stock availability, consumer choice patterns, various fulfillment options and different pricing and promotion strategies, that payments really should be taken care of as a fundamental pillar so they can focus on attracting and retaining customers along every step until a purchase is made, with full confidence the payment will work.

The route to achieving this peace of mind – and the space to innovate elsewhere – is to seek out a trusted payments advisor that has been around the block, has a robust product and services stack, has scale, and can deliver near 100% uptime.

Rory Bosman, Executive for Sales & Marketing at Ecentric Payment Systems adds that shoppers also want value from retailers, physical or online, when it comes to deciding where to spend their hard-earned money, especially in this difficult socio-economic environment.

As payment systems continue to develop, often building on offerings already in the market, Bosman details nine key trends he sees as dominating 2024.

1. Buy now, pay later

There will be a continued growth in offerings that allow consumers to purchase goods on interest free credit, paying the item off in tranches of, for example, three months. In this space, where the retailer carries the interest, there are an increasing number of solutions companies such as Float, Pay Just Now, Payflex, Happy Pay, and others.

Merchants are seeing an increase in purchases because of this solution, which allows South Africans access to goods that they usually wouldn’t be able to afford if they had to pay cash immediately.

Not paying interest is also very attractive for indebted South Africans who may need, for example, a new fridge because of loadshedding, especially if they don’t have access to a credit card (which comes with a high interest rate and is not always attractive).

2. PayShap

The instant interbank digital payment service, which offers smaller payments at low cost, is set to continue being a growth driver as more banks and participants join the network. While there hasn’t been large adoption yet, the addition of more participants such as the mobile network operators with consumers that have wallets, in what could be seen as a PayShap 2.0, will result in a large push forward.

When PayShap launched with only the big four banks, there were high fees that were individually set, which the competitive environment has pushed down, especially as challenger banks such as Tyme and Discovery Bank offer the service at no cost.

Delinking the product from the need to have a bank account will also result in more uptake.

Currently consumer-to-consumer, there is also the potential for consumer-to-business, which could bring retailers on board.

In China, there is a significant push towards instant payments, and – once that has been refined – could enable an interesting shift in the payments space. This is an area to watch for the fourth quarter of 2024.

3. Digital Wallets beyond South Africa

Outside of South Africa and across sub-Saharan Africa, digital wallet use dominates as a payment platform or technology, with customers lining up to enable this from the banking space through to cellphone operators.

In this region, we see relatively few banking and card transactions, while digital wallet adoption is surpassing that of traditional banking solutions. This is partially because of less population density, which doesn’t justify the cost of issuing scheme-accredited cards such as Visa and MasterCard.

4. Payment orchestration

This trend is relevant to the merchant, especially in the ecommerce world, where the merchant’s goal is to meet consumers at every touch point, by offering as many payment methods as possible.

However, they can’t always get all the required solutions from one payment gateway or a Fintech provider, which means there’s a cost imperative that requires them to be able to split their service providers.

Coming into this mix is a growing sub-industry in payment orchestration that pulls various payment methods together for the merchant, helping them grow so consumers don’t abandon their basket because they can’t check out in their preferred manner.

Interestingly, AI is starting to play a role in this solution, intelligently working out routing rules and determining which is the best time of day to transfer money.

5. Last mile deliveries

The COVID-19 lockdown led to a change in lifestyle in terms of people shopping online and having items delivered to their homes, from bread and milk to dinner. This shift to ecommerce will continue to grow across all economic spheres and there is interest from operators in more cash-based environments such as informal settlements to offer a payment solution.

Here, the same economic drivers are in place such as the convenience cost versus that of going to the shop.

This area will speed up when it comes to increasing gains in other payment methods with the integration of PayShap and other digital payment methods being enabled.

6. Instant EFTs

This solution is expected to mature from being a screen-grabbing operation – which banks have warned about as being insecure – to one that is safe and offers convenience. Initially, the success rate wasn’t high but now the consumer experience rate has improved with deeper integration into banks, which reduces the high rate of decline, or the clunky experience.

This method is popular where online transaction values are limited, or people may not be carrying their card when shopping. Merchants may also push this payment system in 2024 because it strips out the cost of card processing fees.

However, it still has a way to go to get to a viable alternative that isn’t frowned upon by the banks and offers customers the assurance that they can, for example, charge back a deal if goods or services are not delivered.

7. Card Scheme Tokenisation

Most online consumers are familiar and comfortable with having their card details stored by their favourite retailer, speeding up future checkouts while negating the need to physically have the card with them at time of purchase.

Visa, Mastercard and the other card schemes have developed their own card tokenisation mechanisms whereby card details will be updated by the schemes as expired, lost or replaced cards are issued.

This means that consumers will never have to recapture card details and online retailers will not have to port their consumers’ card tokens, when changing payment service providers.

8. In store

Retailers are also doing more in shops when it comes to payment devices, such as enabling rewards & loyalty cards that provide information that allows them to operate on an optimised level using enhanced customer knowledge.

They can also use the same point of sale payment devices to assist with stock take, run delivery applications, and enable pay-at-table/order-at-table, allowing retailers to place just-in-time orders, accept deliveries, and send out ecommerce orders using the same set of technology.

Security

Perhaps the biggest trend for 2024 will be not only the need for security enhancements but also consumer education. Between 2022 and 2023, there was a 75% increase in cyber fraud across Africa in all respects.

Consumers will need to know how to identify secure sites or apps through URLs as well as which security standards should be displayed in terms of logos displayed. At the same time, being redirected to banking apps on phones to approve deals adds another layer of security comfort for consumers.

“Ultimately, the right payment solution for any business is the one consumers demand,” says Bosman. He adds that whatever solution is offered, it must be secure because the loss of reputation if a consumer is defrauded is a potential death knell, especially to SMMEs in South Africa.

[Featured Image Credit]