Have you ever found yourself tracing your spending from the last pay day to try and understand what exactly happened to the salary you got three weeks ago?
It's a pitfall many of us can fall into, especially with online shopping having become so much easier to do in SA.
The week before pay day is usually in the toughest as we beat ourselves on having spent so much online.
A study conducted by World Wide Worx with Mastercard – Online Retail in South Africa 2022 - reveals that at a total level, online retail made up around 4.7% of the total spend.
Head of Card Acquiring at Standard bank Ethel Nyembe says, “For the majority of consumers, shopping (including online shopping) tends to happen closer to payday, especially when it falls on a weekday. When looking at online shopping spend using a credit card by white collar workers, we see increased spend after the 25th of the month.”
This is due to the convenience that has been brought by digitalisation. With Covid-19 having had imposed restrictions on physical contact, e-commerce grew significantly “as people chose to shop online in the comfort of their own homes with convenient delivery times that work around their schedules and daily lives.”
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Tap-to-Pay developments on mobile devices also saw a rise in user adoptions. Since the launch of ApplePay, Ethel says digital payments have become the fastest adoption both in the value of transactions and the number of transactions.
In fact, a comparison between card-not-present and card-present spending has shown that card-not-present transactions especially with credit cards, is on an undeniable rise, according to Ethel.
Although online shopping on reputable sites is recommended, unnecessary, excessive expenditure and cyber insecurity stand firmly as dangers to the practice.
“Excessive spending, however, whether it be online or in-store, should be guarded against as this could lead to unnecessary monthly expenses and unneeded goods or services bought. Addictive online spending behaviour could lead to increased debt obligations and place strain on disposable income,” says Ethel.
To avoid falling victim to these dangers, Ethel advises that online shoppers:
- Always check that you are shopping at a reputable company, and that the payments page is secure with a lock sign in the URL.
- Activate additional security measures like two-factor authentication to enhance security whilst doing online shopping.
- Always be vigilant so as not to fall prey to the ever-changing online fraud modus operandi.
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Over and above all, she encourages saving more and budgeting for “a healthy financial position”.
“Buying according to a budget is key and sticking to a shopping list and addressing needs and not just wants are a few examples of how one could limit overspending.”
Not only would you be avoiding additional ‘convenience’ charges such as delivery fees, admin fees and undisclosed charges added onto the prices of meals on food delivery applications for instance, but you would be at more ease after transactions.
For Ethel, alternatives include:
- Purchasing from physical stores using card or other payment types
- Ordering online, and picking up and paying in-store
- Ordering online, with payment upon delivery of goods
