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Simon Brown: I'm talking to Yusuf Shaikh, Yoko's strategist. Youssef, thank you very much for today. Going cashless – It’s certainly all the rage on social media, but we’ll get to that in a moment. But cash is really on the decline. The pandemic accelerated that. Technology is really making a difference here.
Yusuf Shaikh: 100 percent, Simon. He thinks there are two important trends that we should be aware of. One is kind of a macro trend, what's happening around the world, and the other is specific to South Africa.
In general, the world is moving towards digital money. Therefore, we are moving away from handling and using physical cash to carry out transactions and moving away from all systems such as checks to fully electronic ones, such as physically owned cards, Apple Pay, Google Pay, etc. Masu. Scan to Pay using your mobile phone.
So it really depends on the customer, the technology that's available to them, and whether they see it as a more convenient way to transact.
On the other hand, and this is also very specific to South Africa, but this is not recent and is still ongoing, there are risks associated with the use of cash.
Think about any small business. They need to receive cash from customers, cash it out daily, and take it to the bank. Banks need to deposit it. Or, if you're a larger business, you'll have a cash van that comes to pick up your cash. Not only are there a lot of cash-in-transit incidents, but also the general risks of walking or driving to a bank with cash in your car, as well as the general risks to your business.
So we're seeing these two trends intersect and businesses like we've seen on social media choosing the cashless path. Because not only does cashless meet customers where they are, it also reduces some of the real risks that businesses face. South Africa.
Simon Brown: These risks are real and, of course, also an expense. You mentioned the check, but of course I completely forgot about the check.
However, for small businesses and retailers, [going cashless] It's a big boon for them. Life is simplified. I don't know if you're in your local market, but you don't need a float. Many of my listeners are [thinking] What exactly is a “float”? It was a change. That's what it is. This makes the process much easier and more seamless.
Yusuf Shaikh: One hundred percent. Let's elaborate a bit more on the floating point number question. We can talk about this anecdotally. There was a market day at junior high school. The day before, I had to go to some small shops and take a 100 rand note and split it into 2 rand, 1 rand and 5 rand to have change for the next day. I think kids these days, if there was a market day, they would have card issuing machines and it would be easy. [transactions].
However, this principle does not apply to small businesses or things like hobbies. That really applies to weekend markets. On the other hand, moving money to digital transaction methods is part of the equation.
The other is that you have greater insight into how you received your money. So once everything is electronic, you can track it against the products you sell and the time of sale. Here, small businesses can enjoy benefits that go beyond just trading. They're looking at the data behind it. They realize that this product sells better than that one. This is more of a peak period for me than any other. Perhaps this is a time when you need additional staff in your store compared to times when trading is a bit slower.
Sure, it's convenience and it's safety, but it's also added this huge layer of insight where you couldn't easily guess whether a company was using cash only before.
Simon Brown: It's a benefit for me too. I recently purchased something and received a receipt via digital email. As she was getting ready, she typed “Yoko” into Gmail and a receipt popped up. It's there digitally.
But there was also a backlash. When I thought about Woolies in particular, I realized that it wasn't Woolies clothes or food, it was Woolies Cafe. But my sense is that it was probably more on social media than in real life.
Yusuf Shaikh: Basically, I think consumers and people on social media are aware of the cashless trend. And even if it was just a cafe, or just a cafe, I think they see it as a sign of things to come.
Of course, some people still rely heavily on cash. And there are sub-segments in the economy, people who come to South Africa or don't currently have a bank account, people who can't easily open a bank account and transact, and people who have cash. There are people who are unable to help themselves and receive a paycheck in cash from their employer. They may be contract employees or not working on a regular salary basis.
So I think there's a certain sub-segment of customers who are working on this cash basis, consumers who are seeing this as being sidelined by some companies. We will expand to others.
But I think the important thing to consider is that in this specific example that we saw with Woolworths Cafe, we're starting with a coffee shop. I think the whole idea is, let's look at specific segments of my business and see how well they do with going cashless. Will it really affect sales? Are you losing 20%, 30% of your sales? And reconsider your decision against the risks you would normally face if you had the cash.
Read: No, Woolies won't stop accepting cash
I think many business owners probably have this idea in their heads. What risks are you removing and what benefits are you gaining if you remove the ability to accept cash? You just have to manage it.
Simon Brown: Yes, I think that's probably the difference between Woolly and U-Save. It will be situational like anything else.
Leave it as is. Thank you, Yusef Shaikh, Yoko's strategist, for your valuable time.
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