
Subscribe & Follow
Jobs
- Internal Audit Manager Cape Town
- Marketing Assistant Stellenbosch
The race for the payments space

“Banks have been surrounded by a moat comprising the size and scale of their networks – something fintech companies lack; credit jurisdiction; expertise, role in economic growth and client inertia to protect their domain,” says Phil Hogg, author of The Challenging Payments Ecosystem at the Seamless Africa 2017 conference at the CTICC this week.
“So what happened to the moat?” he asks.
It all started in 2008 with the financial crisis. Consumer confidence in venerable brands was eroded. This in turn, created a flurry of regulation, and banks became more inward than outward looking.
Digital advances such as low-cost data services, affordable cloud-based technology and mobile device ubiquity have also played a role.
Then there’s the human factor. The changing nature of consumer behaviour, including the impact of social media and the demand for real-time response, demographics, the e-commerce experience and the rise of the middle class, have also changed the face of banking, Hogg says.
New battlefield
“Payments are the new field of battle, with the exponential growth in debit and credit card usage. Money is going out of fashion and there’s a decline in ATM usage,” he says.
To counteract the threat of fintech, banks must meet merchants’ needs through access to software and over-the-top service.
Weapon of choice
“Mobility is the weapon of choice, especially in emerging markets like Africa where cross-border payment is often a requirement.
Hogg says that there has been a growth in global venture capital investment in fintech, which is starting to mature. The Trump presidency, Brexit and the slow down in China’s growth are also influencing where investors put their money.
The counterattack
Banks need to have a fintech strategy or risk losing their market share. They should look at containing costs, targeting client segments, effectively using big data and forming partnerships and alliances with fintech companies, he concludes.

About Nicci Botha
Nicci Botha has been wordsmithing for more than 20 years, covering just about every subject under the sun and then some. She's strung together words on sustainable development, maritime matters, mining, marketing, medical, lifestyle... and that elixir of life - chocolate. Nicci has worked for local and international media houses including Primedia, Caxton, Lloyd's and Reuters. Her new passion is digital media.Related
Financial Narrative launches specialist financial services communications consultancy 12 Nov 2024 How audience data is shaping Canadian journalism 29 Feb 2024 Upsurge in unsolicited bank account closures recorded in South Africa 14 Aug 2023 Big data key to hospitality, but human intervention crucial for achieving genuine value 2 May 2023 AI and data science can help banks make smarter and fairer credit decisions 12 Apr 2023
