With major banks now offering established apps, feature-rich websites, and a multi-product digital goods and services marketplace, where do the opportunities for competitive advantage still lie? One answer is with cash voucher withdrawals.
Cash vouchers allow banks access to the unbanked population, giving their customers the option to send cash from their own accounts to consumers without accounts. For example, a bank customer can send money from their bank account to a friend or family member to be cashed out at an ATM or partner store.
Digitisation is now a well-recognised phenomenon in this age of smartphones and internet access. However, in Africa, almost 60% of the population do not have a traditional bank account.
The main benefits for your customers is that they do not need to visit a bank branch to achieve this, and their friend does not have to bank with the same bank, or even have any bank account to receive the funds. Sending the funds is easy – these can be cardless, sent online, via an app, by using USSD codes, or at an ATM. Importantly, access to cash is opened up because a cellphone or ID number is all that is required for voucher redemption.
The benefits for the bank go beyond simply meeting consumer demand: Cash vouchers provide customers with more ways to send money, and can increase digital adoption across multiple channels. Banks are given the opportunity to interact with consumers who don’t bank with them. This provides the scope to extend their reach and gain customers – either from competitors, or as a way to tap into the unbanked population. Importantly, banks can gain an edge over competitors by offering this as a new, better, or more efficient service than other banks.
An important aspect of cash vouchers is the fact that they can be redeemed at retailers, as well as at bank ATMs.
Cash outs at retailer partners immediately expands the bank’s accessibility to its customers, especially in rural areas where ATMs are not as ubiquitous as large retailer stores. For consumers living or working in rural areas, travel time and costs can be dramatically decreased when sending or receiving cash. Consumers can feel safer redeeming their cash because they can avoid long queues at ATMs and can cash-out their voucher while buying groceries or shopping at a partner store. It is an important feature that they can redeem or send cash at a time and place that is most convenient for them. Knowing that a particular bank is partnered with a consumer’s local store could be the deciding factor in that consumer choosing to bank with you over a competitor.
With the top five banks in South Africa already offering some form of digital vouchers or cardless withdrawal, consumers are beginning to expect this offering.
After the recent COVID-19 pandemic lockdowns in South Africa, mobile money services and digital banking exploded in usage. This was as South Africans were isolated from each other and opted to use digital solutions to send money to friends and family members that they could not come into contact with.
Today, digital banking services need to be convenient and dependable to keep consumers happy. Payment platforms need to be able to handle high-volume, low-value transactions, with maximum uptime. Consumers typically send smaller amounts to be cashed out by friends or family members and demand that the service be available, when they want it. Partnering with an established payments platform – such as Electrum Payments – will help you get this offering to market fast.
Electrum’s existing integrations with South Africa’s top retailers means that expanding your reach to cash-outs at their stores can happen rapidly, while trust in your offering is being built through partnerships with these businesses.
The power of a single API integration allows you to connect to multiple partners when building your service. The cloud-based and agile solution will allow you to grow your business and adapt to market changes as and when required.
In South Africa, safe and convenient access to cash can’t be ignored if you want to offer a competitive service. Banks need to ensure that they are meeting this consumer demand and offering the services that make the most sense for the current market. Use cash vouchers to set your business apart.
If you would like to explore building out a world-class payments solution, chat to us today.