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  • November 17, 2023
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It has been discovered that the underbanked in the informal sector in South Africa amounts to more than 19 million individuals. Apart from this, the informal sector generates up to R260 Billion per year.
In a panel discussion hosted by Payfast, to kick off the launch of their 2023 annual industry report that provides a comprehensive overview of South Africa’s new State of Pay, key leaders from Capitec, Mukuru, Yebo Fresh, and the Shopaholic came together to discuss how ecommerce platforms, banks, and merchants can drive financial inclusion through tapping into opportunities in the informal sector.
Thinking about the Growth of the Entire South African Economy
Addressing the topic of driving financial inclusion in the informal sector, Managing Director of Payfast, Brendan Williamson said,” One of the key takeaways of this year’s report is that making online transactions accessible to this market segment is critical, not only for merchants who want to grow their business – but for the growth of the entire South African economy”.
During the panel discussion leaders debunked myths surrounding the safety of making online purchases which are one of the key concerns for South African’s when it comes to ecommerce and encouraged businesses to take advantage of the already existing services available in the informal sector to begin to engage them into the digital economy.
Drawing Examples from Nigeria’s Booming eCommerce Framework
Another point that was raised in the discussion was how Nigeria is an outstanding example of how the country has adapted their economic framework to make room for online businesses – a country where 65% of transactions are still being made with cash.
In 2022, the total E-commerce revenue in Nigeria reached $3.1 Billion and is expected to peak at $9.02 Billion by the end of 2023. Over 70% of nationwide purchases are made online.

Innovations in technology have made financial inclusion more accessible than ever before. David Adams, Chief Commercial Officer of Payfast says that with the proliferation of digitised cash offerings, digital wallets, and accessible transactions through smartphones, feature phones or even WhatsApp, there is no excuse to not be planning with financial inclusion in mind.
Data shows Hesitation in the Informal Sector
To understand sentiment towards these concepts and how local businesses are implementing financial inclusion initiatives, Payfast conducted a survey across their merchant database.
The data showed that while 49% saw open commerce as an opportunity to grow their business, 56% believe it is too early to say what kind of impact it will have on their organisation.

In terms of taking steps toward reaching more consumers, only 11% of merchants plan to introduce delivery to informal settlements and rural areas within the next year. This indicates that 80% of merchants still do not intend to introduce delivery into informal settlements at all in the near future, pointing to a need to take make inclusivity a bigger priority.

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