SA BANKS PASS TEN MILLION VISA CARDS
Visa International announced today that its member banks in SA have issued more than ten million Visa cards as the country's banking sector steps up initiatives to bring the 13 million unbanked individuals into the formal financial services system. “It is our Visa member banks that have issued these ten million Visa cards, so I would like to congratulate them on this impressive achievement,” says Chris Winter, GM and senior vice-president for sub-Saharan Africa at Visa International. “This important milestone coincides with a crucial time in the country’s social and economic evolution.”
“Research conducted in SA and all around the world shows that there is a strong and very positive correlation between the increased use of card and electronic payments and growth in an economy. This has significant implications for industry-wide banking initiatives like the national bank account, Mzansi. This is an entirely card-based bank account, and we expect that it will help to continue the rapid growth we have seen in Visa debit cards,” says Winter.
Even though a large portion of SA’s population does not use card and electronic payments, there has still been dramatic growth in this transaction method since the turn of the century. Between 2000 and 2003, the average growth rate of Visa debit cards issued was 179% per annum. In the same period, the amount of money processed using Visa debit cards soared to R87,095bn in January 2004 from a base of R1,34bn in January 2000, indicating the growing popularity of these transaction methods.
SA is one of many countries around the world facing the challenge of how best to draw unbanked individuals into the formal banking systems.
According to Anne Cobb, president of Visa International Central and Eastern Europe, Middle East and Africa (CEMEA), roughly two thirds of the world’s population is unbanked – that equates to about four billion people who mainly use cash as their sole means of transacting.
“One of the reasons that cash-dependent countries tend to have low economic growth rates is that currency stock held outside the system deprives banks of funds needed for credit expansion and monetary growth. Every currency unit that circulates as hard cash is a missed opportunity to invest, develop and grow an economy. Ten million Visa cards in SA is evidence that significant progress is being made in bringing more Rands into the SA banking system.”
All evidence points to the fact that the more people who join the banking system, the more stable it becomes. This in turn has a positive and lasting effect on an economy, social reform and government efficiency. In SA, this has already had a benefit through the rapid increased use of debit cards and cards such as the Allpay Sekulula card, a Visa Electron card available from Absa in four provinces, which permits pensioners and people receiving child and disability benefits to collect and safeguard their funds using the secure Visa debit card.
Despite the range of creative solutions that have already been launched by Visa International’s member banks to help expand the banking market, Winter says the organisation remains committed to finding new ways to enable its member banks to deliver improved services to the unbanked. “We are committed to supporting our member banks in SA as they broaden the card and electronic payment market by issuing more cards, educate card holders about using the card for everyday shopping, and increase the number of terminals that accept Visa cards in shops, supermarkets and at other merchants.”