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Why South African Banks Have the Key to Mobile Payments

March 8, 2017         By: Steven Anderson

If there’s one thing we know in the United States, it’s that most people trust their neighborhood bank.

That’s not always the case with big chain banks like Wells Fargo, but for most people’s local bank, it’s still a very trustworthy place to go. That, according to a recent report from Disrupt Africa, may be the key to jumpstarting the mobile payments industry in South Africa, and potentially beyond as well.

Essentially, the Disrupt Africa report points out that, since banks are a trusted part of everyday life, these are the same places who should be leading the way when it comes to mobile payments. That trust can be a huge impetus in taking advantage of a new technology. Even the most hidebound might think twice when the phrase “My bank’s offering this new thing” is involved.

It’s not just bank customers that need the nudge, either; mobile payments also require plenty of businesses that accept the tool as a payment mechanism. It doesn’t matter how trusted the system is or how the customers feel about it; if no business will accept it over cash, then what’s the point? If banks can extend that same level of trust seen with consumers to businesses—many of which are also consumers in a sense—that should help give mobile payment systems some extra leverage.

Many banks are offering mobile payment systems almost grudgingly, with some offering the bigger names while others work to develop proprietary internal systems. Regardless of the form taken here, though, banks have an excellent opportunity to serve as the necessary source of trust to encourage use of mobile payment systems throughout the spectrum.

We’re already seeing this in South Africa, as more users get comfortable with mobile payments and mobile shopping, and we could be seeing this in a lot more places as banks throw the incredible weight of their customers’ trust behind mobile payments.

In some circles, it’s called the “halo effect;” when a good or service is perceived as connected to a much more trusted organization, that good or service benefits from the connection and is more trustworthy. The more banks use this effect, the better off the mobile payment field should be.