This is a blog entry I don’t really want to write.

Apple Pay launched in South Africa a few weeks ago with Absa, Nedbank and Discovery. I’ve written extensively about payments and the opportunities banks can seize, and Apple Pay’s (very belated) entry into South Africa is something we should all be pleased with.

Or should we?

Let’s have a quick, incomplete look at payments in South Africa and see how Apple’s entry will fit in.

I’m setting aside the payment gateways online such as PayU, PayFast, and newer entrant Ozow, and even the online instalment-sale provider Mobicred, which I wrote about recently.

These are all payment mechanisms that don’t require you to have your card with you.

Standard Bank’s SnapScan has taken hold in the informal sector, such as flea markets, and small coffee shops with its QR code.

SnapScan is an app on your phone, which you link to your bank account. It doesn’t have to be a Standard Bank account. When you buy your coffee, the teller rings up the purchase as usual, you scan the QR code provided and enter the amount you want to pay. The payment goes through and the merchant receives a confirmation SMS on a super-cheap feature phone. It is a system by Standard Bank, but it works with any sending or receiving bank.

Zapper has found a home in restaurants. Like SnapScan, it’s an app that you need to link to a bank account. It also works with a QR code. The difference is that the Zapper QR code comes embedded with the amount. So when you scan the QR code, you have the option to pay the displayed amount, or add in a tip if you would like to.

FNB has several cardless options. It actually has a service that’s similar to Apple Pay. Using the NFC chip in your phone, you can tap your phone as if it were your credit or debit card. No need to take your card out of your wallet, or even have the card with you. It has been available since mid-2020 on the Android platform.

FNB’s QR code offering is slightly different. You can set yourself up as a Speedpoint merchant from inside the app. You choose your trading name and apply for a merchant number. When you sell something, your phone displays your merchant QR code, and your customer uses their FNB app to scan the code and make the payment.

Geo Payment, also from FNB,  works on your location. If you are near somebody who also has an FNB bank account, and their phone has the FNB app, you can both open the Geo Payment option on your phones. One party sets themselves up as the receiver and the other as the sender. You can choose the account you want to transact from, and you can send any amount.

All the major banks have the ability to send person-to-person payments using e-wallets linked to the receiver’s phone number.

So card-free banking is available in South Africa, and has been for years. It’s convenient, safe and quick. From the customer’s point of view, it’s great! You don’t have to carry bank cards with you everywhere, which is one less thing to worry about.

From the banks’ point of view, what are the upsides and what are the downsides? With Zapper and SnapScan, the bank is invisible. You’re paying from your account, but suddenly, the bank brand has disappeared. When that happens, who owns the customer? Are you a SnapScan customer, a Zapper customer, or does the relationship reside with the bank? I would argue that these services actually undermine a bank’s relationship with its customer.

Apple Pay is another assault on the banks’ ability to hold on to the customer. I guess some banks would argue that they will win customers by offering Apple Pay. But will they? Did FNB win customers by allowing their (Android) customers to tap their phones to pay? I doubt it.

Speaking of FNB, they are the outlier here. Most of their payment options go through their own app. That means they are building their relationship with their customer, not outsourcing it to Apple, or SnapScan or Zapper.

It would be remiss of me to ignore Apple Pay’s entry into the market. But is it a game changer? I don’t think so.