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Black Friday sees 24-hour transaction volumes up 14% from 2019

‘We didn’t see the kind of volumes that we were hoping for,’ reports PayU SA CEO Karen Nadasen.

NOMPU SIZIBA: Payments company PayU has released data showing the performance of transactions that took place over Black Friday 2020. The data shows that Black Friday trading volumes rose by 14.1% over the 24-hour period, compared to the 2019 period. But this increase is said to be quite tepid when compared to 2019’s performance increase against 2018. PayU saw trading volumes up 9.1% over the weekdays Monday to Thursday in the run-up to Black Friday itself. It found interesting developments, like 60% of the e-commerce transactions made were done on mobile phones.

Well, to find out more I’m joined on the line by Karen Nadasen, the CEO at PayU South Africa. Thank you so much, Karen, for joining us. Just tell us what you found to be some of the most interesting trends around Black Friday this year.

KAREN NADASEN: Hi, Nompu. Certainly it was a very, very interesting Black Friday. We generally wait for that zero-zero-one hour, and the whole team is up. That’s when a lot of shopping happens and everyone is online. Unfortunately this year nothing really happened. We saw a 33% decline in the volumes coming through, and significantly less spend – 63% less spend in that hour. Up to about 2:00am there was still not a lot of shopping going on, sort of 9% less spending. And then South Africans, including ourselves, decided to go to bed.

At about 8:00am we saw the monitors going off, and then all of a sudden there was an increase in shopping, and people started to shop again.

NOMPU SIZIBA: Very interesting. And of course, earlier in the year, e-commerce or online shopping picked up a lot more than before, because of Covid.

KAREN NADASEN: Absolutely. During Covid we saw about a 50% increase in e-commerce, and so we anticipated that that would continue into Black Friday. Generally year on year we see about a 25% increase, and certainly the increase in e-commerce.

We anticipated between a 30 and 35% increase this year on Black Friday sales, but unfortunately that wasn’t the case. As you said, 14.1%.

Some very interesting nuggets. I think consumers this year were really, really offered a deal. So we saw really good increases in the retail, specifically fashion and beauty. However, even in those industries, if you didn’t have great deals you didn’t really get the money. So we saw some beauty merchants that had declines of around 33% in comparison to last year, even though their trading values in comparison to a normal day were up. And then we saw other beauty merchants that increased 250% in comparison to last year.

NOMPU SIZIBA: Wow.

KAREN NADASEN: So it really was all about the deal.

NOMPU SIZIBA: And then what about spaces like the DIY space?

KAREN NADASEN: In the DIY space we did see some increases, but they also tended to have sales throughout November, calling it “Black November”. So some of those spaces showed us increases of around, say, 290, 300%.

NOMPU SIZIBA: What did you see in terms of being a payment specialist? What did you see in terms of the way people were paying?

KAREN NADASEN: This was really interesting. We really thought there would more distribution of payment methods, but that’s not what we saw. I believe that some other payment gateways will see that. However, generally we saw 95% of card transactions – that’s credit card and debit card. A small percentage of EFT, and then other payment methods like Discovery Miles and eBucks.

NOMPU SIZIBA: Why do you think the card is still so strong in South Africa?

KAREN NADASEN: In South Africa, particularly, there’s a large sector that is actually banked. We have 80% of the population that is banked. There’s also, I think, great innovation in terms of maturity and tokenisation around card payments, and banks such as Capitec and Nedbank, and the other banks that have mobilised bank accounts and some of the other areas of the market. So it just seems like people are comfortable with the card. This was certainly the payment method of choice, certainly during Black Friday.

NOMPU SIZIBA: It would have been good to speak to you both about the e-commerce space – that is, the online space and the physical space – so that we get a holistic perspective of what really went down in Black Friday.

But I suppose the bottom line is that this is Covid Year 2020, people have less money and their propensity to spend is that much more reduced.

KAREN NADASEN: Absolutely. And I think that is exactly why we didn’t see the kind of volumes that we were hoping for. It’s because people were really out there hunting for bargains.

NOMPU SIZIBA: Karen, we’re going to leave it there. Thank you so much for your time. That was Karen Nadasen, the CEO at PayU South Africa.

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