Last night’s State of the Nation Address touched on a number of valuable points around the government’s commitment to work together with South African businesses to build a better country for all.
Priorities mentioned included the need to accelerate inclusive economic growth and job creation as well as the duty-bound necessity to improve the lives of all South Africans, especially the poor. Additionally, after being confronted by a technical recession in 2018, it was confirmed that there was a need to restore overall investor confidence in South Africa.
Daneel Jordaan, Head of Products and Acting Country Manager at Visa South Africa – leaders in global payments technology, believes that one answer could be the advancement of the economy through digitised payment solutions.
Although this may not be a ‘silver bullet’, studies have shown that there is a direct correlation between electronic payments and macroeconomic growth. Between 2011 and 2015, Moody’s Analytics estimated that higher card usage as an electronic payment method contributed an additional $296 billion to consumption, or a 0.1% cumulative increase in global GDP. South Africa was included in the study sample.
The reason was quite simple – higher consumption and spending results in increased productivity, business development and job growth as a knock-on effect. The study echoed this by showing that increased electronic payments usage added almost 2.6 million jobs per year across the countries sampled between 2011 and 2015.
Expanding economic access through digitizing payments is aligned with the President’s proposed Buy South Africa Programme, where more focus will be placed on developing local producers and businesses to drive the South African economy from the inside. “Enabling local businesses with the latest innovations in payments means faster transactions, which increases sales volumes and improves customer loyalty. This is one of the many ways that technology powers businesses to thrive,” adds Jordaan.
It is clear that by digitising payments, growth and access to the economy is harnessed – which is also an important contributor to addressing President Cyril Ramaphosa’s goal to drive the fourth industrial revolution.