Mobicred driving SA’s e-commerce with cardless credit

Mobicred could soon force old school credit cards, store cards and once-off loans to make room soon thanks to its cardless offering. With six years and a pandemic under its belt, Mobicred’s unique all-digital revolving credit facility has attracted more than 3 000 online retailers and continues to grow fast, signing over 150 stores a month during the pandemic.

While it has picked up speed lately due to COVID-19, Mzansi’s online retail still makes up just 1.8% of total retail activity, compared to the US at 18% and the UK at 30%. Mobicred CEO Jason Sive explains that South Africa has a high proportion of physical mall space per capita, and SA shoppers clearly love and trust the physical buying and browsing experience.

Having said that though, the tide might soon be turning – according to a recent study by Nielsen, 68% of SA consumers reduced their visits to physical supermarkets during COVID-19, while 37% increased their online shopping activity. FNB has seen average e-commerce spend grow 30% year-on-year during the 1st half of 2020, while the average bricks & mortar spend declined 12%.

Businesses are also responding with RMB estimating there now being about 5 000 businesses online in the country with a turnover of R100 000 or more. Across all segments this may be much more, as payment gateway PayFast reports having more than 70 000 merchants as clients.

“For the first time we are seeing the more traditional brick and mortar stores taking online seriously,” says Sive. “We believe this is what it will take to really move the needle in terms of online penetration in the retail environment.”

The pandemic has raised consumers’ expectations that all businesses should offer digital payment options for everything – from hailing a ride to paying for groceries and takeaways, signalling that more work still lies ahead. RMB reports that e-commerce card purchases currently make up 8% of total card purchases in SA. However, as credit card enquiries fell by 49% year on year in 2020 (according to TransUnion), alternative credit options are becoming a major contender in the digital payments’ environment.

To help retailers – both bricks and mortar and online – succeed on the Web, Mobicred offers a virtual mall where they can display their special offers. “All Mobicred customers can view these specials on the Mobicred Mall on one page. It’s a value add to both retailers and customers,” he says.

“There’s nothing else like it in the market,” says Sive. “Big retailers may offer store credit, but consumers don’t like to apply for a new line of credit at every store. Mobicred offers one application, one account and one line of credit with a large variety of stores.”

Mobicred also differs from credit cards:

“Most people think of revolving credit as credit cards, and yes, credit cards are a form of revolving credit. But Mobicred is not linked to a bank account or any other card and therefore not vulnerable to card-based fraud. It is a stand-alone facility.”

He adds that retailers have overcome their initial objections to the new form of credit. “Merchants are recognising that customers want choice in all aspects of the online experience, including delivery, click and collect as well as payment tender types.”

As a result of ticking many boxes with shops and shoppers, retailers big and small have signed up, including Dis-Chem, Takealot, Superbalist, Incredible Connection, Hifi Corporation, Flysafair, Clicks, Onedayonly, BidorBuy, iStore, Game, Netflorist, Loot, Sportsmans Warehouse and Travelstart.