For ride-hailing companies, going cashless in emerging markets is rarely straightforward. South Africa’s ride-hailing market is projected to nearly triple by 2033, making it one of the fastest-growing mobility markets, and one where the shift to digital payments is well underway.

Cards account for 63% of all digital transactions, eWallets keep gaining ground, and cash is steadily losing share.

But serving both sides of a marketplace means splitting each fare between the driver and the platform in real time, paying drivers out through rails they actually use, and doing all of it through a single local integration.

This partnership makes it possible. Through dLocal’s infrastructure, inDrive can now accept local cards in-app, including real-time payouts via PayShap, split transactions automatically between the driver’s share and the platform fee, and pay out driver earnings through South African domestic rails.

Reducing reliance on cash also lowers exposure to fraud and improves security for drivers on the road.

Cash remains available as a payment method where it’s still the preferred option, making this an expansion of choice, not a replacement.

South Africa is the first market where companies have run this model end-to-end. dLocal’s coverage of local payment methods across 44+ markets, including local cards, mobile money, bank transfers, RTPs, and eWallets, means the same model can follow into additional markets across Africa, the Middle East, and Latin America, through a single connection already in place.

“South Africa is a key market for inDrive, and getting payments right here matters, not only for the passengers who want a convenient cashless experience but also for the drivers who depend on fast, reliable payouts,” said Ashif Black, Country Representative in South Africa at inDrive. “dLocal gives us the ability to do both, in one integration, in a market where that combination wasn’t available before.”

“Making payments work in emerging markets takes more than a technical integration. It takes local infrastructure, local relationships, and an understanding of how money actually moves in each market,” said Barrie Swart, Country Manager (South Africa) at dLocal. “This partnership in South Africa is a strong example of what becomes possible when all of that is in place.”

Currency devaluation, political instability, and service disruptions are endemic. Africa is not for sissies, as the saying goes.

In navigating those challenges, relationships matter. It’s not so much about throwing money at a problem, it’s about investing time, building trust, meeting with partners and regulators, and understanding each other’s needs.

Africa offers an enormous upside for those prepared to make this time investment. The continent’s population is set to reach 2.5 billion by 2050, and Africa’s people are embracing digital technology, as the World Bank confirms.

They are leveraging digital connectivity to improve their lives, educate themselves, send remittances, and start small enterprises. There is value in investing in that level of human development.

The payments opportunity

Running through this African growth trajectory is a particular business thread: payments. There are opportunities for anyone who can simplify, rationalise and standardise payments for the continent’s dynamic financial economy.

An organisation in just such a position is MultiChoice, the leading pan-African video entertainment provider for almost 40 years. In building a pay-TV network across the continent, with up to 23.5 million customers across 50+ markets, and 100 million+ monthly viewers, MultiChoice also built relationships across the continent to collect payments, for DStv, GOtv, and Showmax – potentially the only large enterprise to need such enormous breadth.

The Group has converted the opportunity that this represents, partnering with global venture-capital firm General Catalyst and payments company Rapyd to launch Moment, which aims to be the broadest, deepest payment network across Africa.

Launching with Showmax and DStv as initial clients, Moment started processing payments for parts of the group in January 2024. By November 2024 MultiChoice was already collecting around 35% of its revenue through Moment rails, and those numbers are rising quickly. Services to other enterprises were rolled out in August.

Moment already collects and disburses across 44 African countries, accepting 200+ local payment methods – spanning in-person payments at over 1 million store and agent locations, mobile money, credit and debit cards, bank transfers, and digital wallets.

Enabling consumers and businesses to move from cash to digital, Moment and its network offers users access to better financial opportunities, lower prices, higher quality goods and services, and full access to the digitally enabled economy.

Expanding the ecosystem

To access the initial target market of large enterprises that will benefit from the reach, breadth, and high performance needed by MultiChoice, Moment has built out a fully cloud-native infrastructure.

The platform can deliver on the high daily and weekly loads needed for one of the largest billing bases on the continent, and also smoothly deal with the potential for network outages, power cuts, and other disruptions.

In order to ensure businesses have access to the daily cash flow they need, Moment has built a robust financial reconciliation and settlement system capable of automating and simplifying the daily reconciliation process for enterprises and enabling them to spend tight staffing budgets efficiently, while getting fast, accurate financial reporting and access to their receivables.

To help these enterprise customers expand their customer bases, Moment opens up the largest mass-market suite of payment channels through its network, enabling businesses to fully tap into the mass market’s buying power for the first time with a single API connection – providing access to more than a million in-person payment locations across spaza shops, modern retail locations, and a host of online payment options tuned to the needs of each local market.

To ensure that Moment’s clients and the market are ready for the future, Moment is building a “coalition” around real-time payments, to educate consumers on the benefits of PayShap and other real-time payment methods that can significantly reduce cost and increase payment speed.

DStv and Moment launched PayShap payments in South Africa as the first “consumer to business” real-time payment option built on South Africa’s RPP payments system. Moment has developed partnerships with similar systems in the SADC countries and Nigeria to expand real-time payments as the market evolves.

Simplifying the process

One of the reasons MultiChoice first looked at the payments space was precisely because it is a complex environment, characterised by multiple service agreements, commission rates and exchange rates. It made sense to try to simplify the payments landscape, for everyone’s benefit.

Africa is a challenging territory, but Africans are agile and innovative. Trends and new solutions emerge constantly.

Any platform entering this space must recognise that there isn’t one answer; there are many. By partnering with MultiChoice, Moment has built out technology with the flexibility to configure the right solution for each market.

The upsides of building for the challenging scale of MultiChoice as a launch client are significant – other enterprises Moment is working with have built unwieldy daily financial operations to manage their own complexity.

Anecdotally, one merchant maintains a staff of 75 people doing reconciliations for their business – operations that can be automated and streamlined leveraging the Moment platform.

Moment presents a vast opportunity in simplifying that process, automating it, while enabling customers to focus on their core business and customer relationships.

Africa is the largest single opportunity in the world. As our population booms over the next 20 years, many new business foundations will need to be laid across the continent – especially in the area of payments.

Payments are the lifeblood of Africa’s economy. Enabling them efficiently and cost-effectively, across the continent, ensures Africa performs to its full potential. Through the partnership with MultiChoice, Moment is well positioned to be at the core of this transformation for decades to come.

Retailers have no choice but to keep pace with rapidly evolving tender types that bring with them massive cost and complexity considerations and most importantly, added security and compliance risk.

While this is certainly true for tier one or enterprise retailers, mid-market retailers often don’t have entire departments dedicated to security and compliance adding to the pressure, because while they may not be as big with as many resources as the enterprise retailers, they are often competing for the same consumers meaning they can’t be left in the dust.

Some consumers still prefer to pay with cash while many others enjoy inserting or tapping their debit or credit cards.

Some savvy consumers opt to tap their smartphones with the likes of Apple Pay or Google Pay, while others still prefer scanning a QR code or using the fairly new interbank instant payment app PayShap.

Retailers need to cater for these ever-evolving tender types, including vouchers, mobile wallets and cryptocurrency.

Ever-increasing payment options, which brings increased attack surfaces, shines the spotlight on security. A security breach comes with an obvious financial risk, but there are also reputational, compliance and legal risks to consider.

Smaller companies often cannot take on the financial burden of having to invest in an array of different security and compliance obligations.

This opens them up to vulnerabilities which they simply cannot control. A partner, who brings enterprise experience and solutions to the mid-market segment, effectively levels the playing field because a one-stop solution that’s encrypted end to end enables smaller retailers to serve customers as effectively and safely as their tier one counterparts.

With a significant proportion of payments still being conducted by cards, the first thing retailers need to understand is that there are Payment Card Industry Data Security Standards (PCI DSS) requirements based on their footprint and volume.

Effective partners come in and initiate risk descoping exercises, which effectively removes or minimises risks by implementing solutions such as point-to-point encryption for cards.

Naturally, cash is still highly prevalent in South Africa, meaning that retailers need clearly defined systems and processes for how they manage cash.

Technology plays an important role here, where reconciliation software ensures that retailers have financial certainty and a single source of truth for all the tender types they accept, and not just card payments.

The card space is already highly regulated, but with increasing options for alternative payments, such as SnapScan, PayShap, and even Cryptocurrency, regulators will mandate security mechanisms and best practice.

Retailers should appreciate that these are new and different technologies, and as such they come with new and different challenges.

Cyber criminals evolve at breakneck speed, and in any organisation there are vulnerabilities in code that can be exploited.

It is non-negotiable to build robust in-house capability to stay ahead of trends or partner with specialists who can. For example, while not directly related to payments, South Africa is now one of the most targeted countries in the world for ransomware.

Yet, despite needing to address vulnerabilities across all attack surfaces, the biggest risk for any organisation is its people, followed by processes that fail.

Retailers should proactively invest heavily in staff training and education, as well as reactive security in the form of audits and controls, which – if effective – can help it identify problems quickly.

Retailers also need to stay on top of preventative controls and measures to prevent any unauthorised individuals accessing their systems.

It is too late if a breach is detected only after the nefarious actor has entered the environment.

An example of this would be workflows to terminate unauthorised access during onboarding and offboarding of staff.

Another effective security strategy, which is made easy with modern, best-of-beed in-person payment solutions, is segregating duties to ensure that one individual never has complete control over a process.

It is evident that every time someone taps their smartphone or enters a voucher code, there are a host of highly complex systems and processes that are triggered, including encryption, payment rails, switching, settlement and reconciliation, among more. Security needs to be woven into every step.

While this really has been the source of many sleepless nights for those in charge of IT and security at mid-market retailers, the evolution of technology means this no longer has to be the case.

As long as a smaller retailer sources a partner with a long, proven track record in the enterprise space that can bring the same level of tier one security and functionality to smaller businesses in simple one-stop solutions, it has all but future-proofed itself and can confidently punch above its weight.

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.

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