A new report on South African spending habits, published by Discovery Bank and Visa, reveals a significant shift toward digital payments.
The SpendTrend25 report—now in its third year—provides an in-depth analysis of South African consumer spending patterns from 2019 to 2024, based on extensive credit card data. One of the most striking findings is the rapid decline in cash usage, with over 84% of South Africans now choosing digital or card payments over cash.
This trend reflects a broader shift in how consumers are managing their finances in an increasingly digital economy.
By combining their vast data sets and analytical expertise, Discovery Bank and Visa offer a clear picture of how consumer behaviours are evolving across the country, particularly as more people turn to digital tools for everyday transactions.
Discovery Bank CEO, Hylton Kallner, commented, “Our latest comprehensive report identifies shifts in financial behaviour, providing practical insights into how much people spent, what they spent on, and how they spent it. We’ve also supplemented the quantitative analyses with detailed consumer survey data to better understand the drivers behind these trends.
“For example, while our data shows a notable shift to digital payments, consumer preferences support this, with over 80% of South Africans surveyed choosing cards or digital payments over cash whenever possible. The same percentage also reports engaging more with credit card rewards and benefits than they did a year ago, focusing on value-based spending.”
Lineshree Moodley, country head for Visa South Africa, said: “South African consumers are undoubtedly feeling the effects of rising living costs, leading to significant changes in spending habits. Our research shows that people across all income levels are making more strategic decisions regarding their spending, relying on financial tools to plan effectively.
“The rapid growth of affordable online and digital payment methods is particularly notable, as are the tools available to help consumers navigate economic pressures.
“Despite these challenges, we hope the insights from SpendTrend25 will inspire meaningful conversations and actions, empowering consumers to not only manage but thrive in this dynamic economic environment.”
Key Findings from SpendTrend25:
Consumer Card Spend Slows Despite Lower Inflation: The rate of consumer card spending growth has decelerated, even as inflation dropped from 6% to 4.4%. While the prime rate cut in September 2024 provided some relief, recovery has been slow, prompting many consumers to focus on value-based spending.
In 2024, average spending growth remained flat, trailing inflation by five percentage points, indicating that factors beyond prices—such as income constraints and rising expenses—are influencing spending behaviour.
Cities like Bloemfontein, East London, and Gqeberha saw higher growth, while Johannesburg, Cape Town, Durban, and Pretoria experienced more subdued spending increases.
Using Long-Term Savings for Short-Term Expenses: While credit cards remain popular due to their convenience, rewards, and functionality, overall spending on active cards remained steady.
Many South Africans are turning to alternatives to ease financial pressure, such as the two-pot retirement system. Research among Discovery Corporate and Employee Fund members reveals that they are using their retirement savings for expenses like home or car costs, debt repayment, school fees, and daily living expenses.
Groceries, Retail, Travel, Dining Out, and Fuel Dominate Spending: Groceries are the largest expenditure for most consumers, but high-net-worth individuals allocate more of their spending to retail and travel.
Residents of Johannesburg spend less on groceries and more on shopping and dining out compared to those in Durban and Cape Town, while those in Bloemfontein, East London, and Gqeberha prioritize food and fuel over travel and dining out. As more people return to the office, fuel spending has risen, with an average 5% increase in 2024, after a 4% decline in 2023.
Convenience Drives Consumer Spending: Busy lifestyles and the demand for convenience are shaping spending patterns. Spending on dining out and takeout grew by 12% in 2024, outpacing the 8% growth in grocery spending. Online grocery shopping is also on the rise, with spending up 15%, while in-store grocery spend grew by just 6%. Notably, this shift to online grocery shopping has not compromised health-conscious choices.
Discovery Vitality data shows that online grocery baskets contain 30% healthy items, while in-store baskets contain 27%. When it comes to prepared food, spending on dining out (up 13%) is growing faster than on takeout (up 10%), highlighting that grocery shopping is seen as a convenient online task, while eating out remains a social activity.
Declining Cash Usage in Favour of Digital Payments: Cash use is steadily declining as more South Africans turn to real-time digital payments. The consumer survey revealed that 67% of South Africans use cash only occasionally or never, with over 84% preferring cards or digital payments whenever possible.
Online shopping continues to grow, with transactions increasing by an average of 5% from 2019 to 2024. Cities like Bloemfontein and East London showed growth rates of 10% and 11%, respectively.
As digital payments continue to rise, consumers expect payment systems to be real-time, fast, cost-effective, and convenient.
The survey found that 86% of consumers believe payments should be as cost-effective as possible, and 84% feel that payments should reach recipients quickly.
