Diversify and digitise:
The promise of 'contactless'
to improve operations

In order to reach new customers, businesses have to consider diversifying and digitising their processes in an effort to improve operational efficiency. E-commerce, contactless payments and automation have made it possible to open up new revenue potential, and also make decisions using new data.

According to Mastercard’s new Payments Index, 95% of South African consumers will consider using at least one emerging payment method as they embrace contactless tap-and-go payments and online shopping, IOL reported. Two-thirds of respondents, 66%, said they had tried a new payment method they would not have tried under normal circumstances due to the Covid-19 pandemic.

For business banking experts, these trends point to two things businesses need to embrace to improve their operational efficiencies in a new digital world: diversifying their businesses through digitisation.

"Diversification implies exploring new markets, new technologies, new products and new solutions, within the context of how this can improve operational efficiencies, and how it can improve client experience," says Herman de Kock, head of Executive Sales at Nedbank.

Digitisation meanwhile, is the process of converting information into a digital format and using data to make decisions. "Whether diversification is part of your plan or not, digitisation should be seen as a key enabler of your strategy."

The purpose of digitisation is for businesses to get closer to their customers through data. As customers and businesses moves further apart physically, digitisation offers the opportunity to move closer together digitally.

Contactless payment methods, such as QR codes, tap-and-go machines, mobile apps or general online and e-commerce transactions, have been one major trend being embraced to achieve this.

According to Business Insider, online store sales growth in SA has grown from R14 billion in 2018 - 1.4% of the total retail sector – to an expected R42 billion in 2021, or 4% of the retail sector. According to the Deloitte Africa Digital Commerce Survey, 22 million South African consumers shopped online in 2020, which is estimated to grow to 32 million by 2024.

In the UK this week, the popularity of contactless card payments has forced regulators to increase the spending limit on each use of a contactless card from £45 to £100, the BBC reported.

"In the context of the client, there's been a number of technologies that’s really enhancing the client experience. The smartphone: the way I can shop on my phone and make payments, go into a shop, I don’t have to take out my cards, but I can use contactless payment technologies, with tap ability," says de Kock.

Moreover, contactless payment methods and e-commerce provide businesses with the tools to receive valuable data from their customers after a transaction is complete.

By paying with a card or a phone at a paypoint, either through a card machine or mobile app, or online using a credit card, while the goods are physically exchanged eventually, the payment linked to the goods becomes data immediately.

Through millions of card transactions, businesses can gain information from their customers about where they live, what their preferences are and gives themselves a competitive advantage regardless of geography, if they sign up to the correct onboarding platforms.

Similarly, e-commerce-based transactions open up new revenue streams for businesses, and also promises future growth if businesses can offer a better user experience for their customers online. Revenue in the SA e-commerce market is expected to grow by 8% annually until the year 2025, according to Statista.

"We are seeing more and more technology of self-service being provided, which allows straight-through processing of client requests. This is also true in the take-up of e-commerce, technology that has always been there, but is also relevant now in contactless payment technology."

A key enabler of meeting these self-service and straight-through processing requests has been automation: the creation and application of technologies to produce and deliver goods and services with minimal human intervention.

For example, Application Programming Interfaces (API) provided by financial institutions can automatically handle complex tasks like payment processing. A business using this technology needs little knowledge of complex coding. APIs make it easier for online stores to improve the user experience by plugging into automated tasks, like closing sales, and benefits mobile users who want seamless shopping cart experiences. It is cost-effective and efficient, and can free up staff to deal with requests that require a more personal touch.

The key for businesses, de Kock says, is to open up to the new revenue potential promised by e-commerce and contactless payments. This allows businesses to streamline operations through automation, and then make decisions using the data that is collected.

"The technology that provides opportunities to improve operations and reduce costs is there, but there will also be areas where more investment will be required, such as digitisation and the need for business to pivot their business models and link into these value chains."

In order to take advantage of the promises of e-commerce, contactless payments and automation, businesses need to consider which platforms to invest in.

A data solution network like MarketEdge, for instance, is Nedbank’s web-based tool that empowers businesses to get a deep understanding of its customer base. Through millions of card transactions, businesses can gain information on the demographics of their customers. This data can show where the bulk of their customers are based, enabling expansion into new territories, or get a competitive edge by learning how you stack up compared to your competition in those same areas.

A curated e-commerce platform like Avo has 450 000 customers. It allows bespoke businesses to open up access to new potential customers regardless of geography, and matches customers' lifestyle needs to products and services through artificial intelligence, safe and secure payments, and bank-grade security. Customers can shop and buy across multiple sectors all on one platform.

And in the banking sector, Nedbank invested in the Nedbank Business hub, a single channel that lets business clients apply for new banking products, transact, request and track services.

“This platform allows staff to stay in touch with their clients on one easy-to-use platform. There’s less paper, it allows self-service, it allows ease-of-doing business and that gives our staff more capacity to bring the human touch to our clients,” says de Kock.

Some of the benefits for clients of the Nedbank Business Hub include:

Convenience of a single point from which to navigate to NetBank Business or NedTreasury.

Track and act on tasks that are urgent or important using the task list.

Track the status of your requests for services or new applications.

Request services or apply for solutions online, with no paperwork.

To find out more about Nedbank's Business Hub or Nedbank's other business banking products, visit here.