South African spenders opt for convenience in SpendTrend25

Consumer spending habits in South Africa have been revealed in the latest SpendTrend25 report, compiled by Discovery Bank in partnership with Visa. Despite lower inflation, the report shows that consumer spending in the country, as measured by credit card data, was muted in 2024. Hylton Kallner, CEO of Discovery Bank, highlighted some key insights from the report in a recent interview with CNBC Africa. One of the main highlights was the impact of historically high interest rates on consumer finances, leading to a trend of value-based spending. Kallner mentioned that the majority of spending in South Africa was seen in groceries, retail, travel, eating out, and fuel, making up over 70% of total spend. An interesting observation was the significant shift to cashless transactions, with two out of three cardholders surveyed indicating they do not use cash at all each month. The report also pointed to the rapid growth of digital banking, real-time transactions, and online services like entertainment and AI. The data, based on 2.6 billion transactions across 12 million cards, provided valuable insights into consumer behavior in different income groups. High net worth and affluent segments showed a greater proportion of spending in retail, eating out, and travel, while the mass market focused more on fuel and groceries. The report also highlighted a trend of online grocery shopping, particularly among 31 to 40-year-olds, who now order 20% of their groceries online. Looking ahead, Kallner discussed how factors like interest rate cuts, VAT increases, and tax brackets could shape consumer spending trends in 2025. He mentioned a shift towards value-based spending due to ongoing financial strain on consumers. Kallner also addressed the impact of the recent temporary pause on higher tariffs and its implications for consumer confidence and spending. Despite external risks like political instability, Discovery Bank remains focused on delivering the best digital banking experience. With over 1.1 million clients and a strong growth trajectory, the bank is set to introduce new security features and AI capabilities to enhance customer service and drive the business forward.