Latest news with #HyltonKallner
News24
03-06-2025
- Business
- News24
SpendTrend25: Why South African wallets are shrinking
Consumer spend on credit cards was muted, despite lower inflation, according to the SpendTrend25 report, a collaborative study by Visa and Discovery Bank. The report analyses credit card spend data across South Africa between 2019 and 2024, spanning 12 million credit cards and 2.6 billion transactions. Discovery Bank CEO, Hylton Kallner, says, 'Our latest comprehensive report identifies shifts in financial behaviour for practical insights into how much people spent, what they spent on, and how they spent it. We've also supplemented the analyses with detailed consumer survey data to gain a deeper understanding of the drivers of the trends that we're observing.' In 2024, inflation fell from 6% to 4.4%, yet consumer spending in South Africa remained flat. While we would expect lower inflation to mean more money to spend, the reality is far different. The SpendTrend25 report reveals a clear trend: many consumers are still feeling the pinch and with less money to spend, spending habits are shifting. Here's how… Rising costs and less disposable income Even though inflation has dropped, interest rates reached 11.75% and remained high for most of 2024. The cost of everyday essentials such as groceries, fuel, and utilities also continued to rise. This is putting a large portion of South Africans' budgets under pressure, leaving less disposable income for other purchases. According to the Euromonitor Voice of the Consumer, 86% of South Africans surveyed feel that the cost of everyday items is rising, which demonstrate the widespread impact of inflation and why it's harder for consumers to afford the things they need. Turning to retirement savings for relief In response to increasing financial strain, many turned to their retirement savings, such as the two-pot retirement savings system to provide relief for essential expenses. By January 2025, the South African Revenue Services reported that about two million South Africans withdrew from their savings pot with a total gross lump sum of R 43.42 billion paid out. The SpendTrend25 research among Discovery Corporate and Employee fund members found they are using their retirement savings for expenses such as home or car costs, paying-off short-term debt, school fees and daily expenses. Among Discovery Bank clients, two-pot withdrawal rates were inversely correlated with Vitality Money status. There were higher withdrawal rates for high-income earners with a low Vitality Money status than lower-income earners with a higher Vitality Money status, highlighting the importance of smart financial habits and sound financial planning. The shift toward value-based spending As consumers become more cost-conscious, value-based spending is gaining traction. 'We've seen a material shift to digital payments in our spend data, this is backed up by consumer preferences whereby over 80% of South Africans surveyed are choosing cards or digital payments over cash whenever they can, and the same percentage engage more with their credit card rewards and benefits than they did a year ago as they focus on value-based spending,' says Kallner. According to the Euromonitor Voice of the Consumer survey included in the SpendTrend25 report, up to 41% of local shoppers now buy more from stores where they have a loyalty card or store credit. The rising uptake and use of these benefits show that consumers want maximum value and offset rising prices by earning rewards or discounts. Discovery Bank has seen that of the key motivators for clients to adopt healthy financial behaviours with its Vitality Money programme, is the ability to book discounted flights and accommodation with Vitality Travel and pay less than the average consumer. Subscriptions to generate value Another shift in consumer spending is the rise of subscriptions. As people face financial pressure, whether from high living costs, interest rates, or stagnant incomes, they have to make careful choices about where to spend their money. Subscription services were once dominated by streaming. By 2024, they have now expanded to include artificial intelligence, sports bookings, and other eCommerce platforms. AI subscriptions saw the highest growth in the share of spend, growing over three times from last year. For Discovery Bank clients, the adoption of AI subscriptions such as ChatGPT and Perplexity have grown more than three times in 2024 compared with the previous year, further demonstrating the shift towards these recurring subscription services. Convenience at a price With busy lifestyles becoming the norm, convenience has become a big factor in how people choose to spend their money. The report highlights that spending on eating out and takeout grew by 12% in 2024 compared with just a 6% increase in in-store shopping. Added to that, it's much easier for shoppers to resist a tempting treat and stick to their grocery budget while adding to a cart on Checkers Sixty60 or Woolies Dash. This is supported by Discovery Vitality data, which shows that online grocery baskets contain 30% healthy food items, compared to 27% in-store. This shift suggests that, even while disposable income may be shrinking, people are still mindful of health-conscious spending, even when opting for convenience. But while convenience is a priority for many, it often comes at a premium, leading consumers to spend more on services that save them time but also increase pressure on their wallets.
The Citizen
27-05-2025
- Business
- The Citizen
SpendTrend25: Why South African wallets are shrinking
In response to increasing financial strain, many turned to their retirement savings, such as the two-pot retirement savings system, to provide relief for essential expenses. Consumer spending on credit cards was muted, despite lower inflation, according to the SpendTrend25 report, a collaborative study by Visa and Discovery Bank. The report analyses credit card spend data across South Africa between 2019 and 2024, spanning 12 million credit cards and 2.6 billion transactions. Discovery Bank CEO, Hylton Kallner, says, 'Our latest comprehensive report identifies shifts in financial behaviour for practical insights into how much people spent, what they spent on, and how they spent it. We've also supplemented the analyses with detailed consumer survey data to gain a deeper understanding of the drivers of the trends that we're observing.' In 2024, inflation fell from 6% to 4.4%, yet consumer spending in South Africa remained flat. While we would expect lower inflation to mean more money to spend, the reality is far different. The SpendTrend25 report reveals a clear trend: many consumers are still feeling the pinch, and with less money to spend, spending habits are shifting. Here's how… Rising costs and less disposable income Although inflation has dropped, interest rates reached 11.75% and remained high for most of 2024. The cost of everyday essentials such as groceries, fuel, and utilities also continued to rise. This is putting a large portion of South Africans' budgets under pressure, leaving less disposable income for other purchases. According to the Euromonitor Voice of the Consumer, 86% of South Africans surveyed feel that the cost of everyday items is rising, which demonstrates the widespread impact of inflation and why it's harder for consumers to afford the things they need. Turning to retirement savings for relief In response to increasing financial strain, many turned to their retirement savings, such as the two-pot retirement savings system, to provide relief for essential expenses. By January 2025, the South African Revenue Services reported that about two million South Africans withdrew from their savings pot with a total gross lump sum of R 43.42 billion paid out. The SpendTrend25 research among Discovery Corporate and Employee fund members found they are using their retirement savings for expenses such as home or car costs, paying off short-term debt, school fees and daily expenses. Among Discovery Bank clients, two-pot withdrawal rates were inversely correlated with Vitality Money status. There were higher withdrawal rates for high-income earners with a low Vitality Money status than for lower-income earners with a higher Vitality Money status, highlighting the importance of smart financial habits and sound financial planning. The shift toward value-based spending As consumers become more cost-conscious, value-based spending is gaining traction. 'We've seen a material shift to digital payments in our spend data, this is backed up by consumer preferences whereby over 80% of South Africans surveyed are choosing cards or digital payments over cash whenever they can, and the same percentage engage more with their credit card rewards and benefits than they did a year ago as they focus on value-based spending,' says Kallner. According to the Euromonitor Voice of the Consumer survey included in the SpendTrend25 report, up to 41% of local shoppers now buy more from stores where they have a loyalty card or store credit. The rising uptake and use of these benefits show that consumers want maximum value and offset rising prices by earning rewards or discounts. Discovery Bank has seen that one of the key motivators for clients to adopt healthy financial behaviours with its Vitality Money programme is the ability to book discounted flights and accommodation with Vitality Travel and pay less than the average consumer. Subscriptions to generate value Another shift in consumer spending is the rise of subscriptions. As people face financial pressure, whether from high living costs, interest rates, or stagnant incomes, they have to make careful choices about where to spend their money. Subscription services were once dominated by streaming. By 2024, they have now expanded to include artificial intelligence, sports bookings, and other eCommerce platforms. AI subscriptions saw the highest growth in the share of spend, growing over three times from last year. For Discovery Bank clients, the adoption of AI subscriptions such as ChatGPT and Perplexity have grown more than three times in 2024 compared with the previous year, further demonstrating the shift towards these recurring subscription services. Convenience at a price With busy lifestyles becoming the norm, convenience has become a big factor in how people choose to spend their money. The report highlights that spending on eating out and takeout grew by 12% in 2024 compared with just a 6% increase in in-store shopping. Added to that, it's much easier for shoppers to resist a tempting treat and stick to their grocery budget while adding to a cart on Checkers Sixty60 or Woolies Dash. This is supported by Discovery Vitality data, which shows that online grocery baskets contain 30% healthy food items, compared to 27% in-store. This shift suggests that, even while disposable income may be shrinking, people are still mindful of health-conscious spending, even when opting for convenience. But while convenience is a priority for many, it often comes at a premium, leading consumers to spend more on services that save them time but also increase pressure on their wallets.
Daily Maverick
08-05-2025
- Business
- Daily Maverick
How to outsmart rising subscriptions so they don't break the bank
It pays to get on top of them before they blow your budget. I'm used to my annual Microsoft 365 Family subscription increasing by a nominal amount each year, but the 33% increase this year was a bit of a shocker. That's when I tapped into the genius of my loyal Money Cents readers – and found an alternative for just R1,199. According to the Discovery SpendTrend 2025 report, AI subscriptions saw the highest growth in share of spend, growing more than three times in 2024 compared with the previous year. Discovery Bank chief executive Hylton Kallner points out that the bank offers a subscription management feature that allows users to manage card links to subscriptions and services. 'This includes creating and managing virtual cards, viewing transactions grouped by card or device and suspending or deleting card links no longer needed. Users can also manage where their card information is stored digitally by merchants,' Kallner told me after reading last week's Money Cents newsletter. How to access the feature Log in to the Discovery Bank app. Select the 'cards' option and tap on 'digital cards'. Choose the digital card you want to view and then scroll to view all linked subscriptions and transactions. From there you can tap on a specific subscription to either suspend or delete it, managing your recurring payment. Lineshree Reddy, country manager for Visa South Africa, said there had been increasing take-up of e-commerce subscriptions such as TakealotMORE. 'Our research [the Discovery SpendTrend 2025] shows that 62% of South Africans subscribe to three or more streaming services, and 29% of South Africans are willing to pay for subscription services that offer discounts or exclusive offers,' she said. Examples of typical offers or services could include next-day delivery and early access to offers such as Black Friday sales. With the growth in subscriptions, Reddy said Visa had looked at ways to enable consumers to have a single view of payments across various merchants and where they are making payments. 'For example, kids today can subscribe to games on devices. The Visa subscription manager gives you a full view of where those transactions are happening and you have the ability to stop recurring payments,' she said. Here are five ways to manage your subscriptions, regardless of which bank you're with: Keep track: Go through your bills from the past six months or even as far back as a year, making a note of the subscriptions you are being charged for and the amounts. Make a note of this in your monthly budget and keep track as payments are debited. Look at the bigger picture: The monthly subscription that is 'just R50 a month' works out to R600 a year and if you have four subscriptions of that amount, that's R2,400 a year. It adds up faster than you can blink. Re-evaluate monthly: Netflix, Amazon Prime, Apple TV+, Showmax, DStv… You are spoilt for choice in terms of streaming subscriptions, but the beauty of these is you can cancel them and resubscribe at a moment's notice. Plan which series or shows you want to watch and unsubscribe from the services you are not using each month. Watch out for auto-renewals: Visit the sites you are subscribed to and uncheck 'automatic renewal' under payment options. Bundle it or share it: In this financial environment, sharing is caring. Consider sharing subscriptions with a friend or sibling. For example, one of you pays for Press Reader and the other for DStv. You get both benefits at a reduced cost. What you said Money Cents readers shared the following advice: Colleen said she contacted service providers to negotiate the annual increases. Gavin had interesting feedback: he makes monthly payments into a separate savings account, which then covers annual costs such as his motor vehicle licence, vehicle service, holiday club contribution and TV licence. 'The transfer is made early in the month so I'm only really aware of the remaining balance within which to handle normal monthly living costs. On the due date the funds are readily available,' he said. DM This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
TimesLIVE
23-04-2025
- Business
- TimesLIVE
SA's spending habits decoded: 10 key insights from the SpendTrend25 report
Discovery Bank and Visa have released SpendTrend25, the third edition of their collaborative annual report of South African consumer spending habits, which is based on an in-depth analysis of credit card spend data. Combining both companies' extensive data sets and analytical expertise, SpendTrend25 tracks how consumer spending habits have evolved between 2019 and 2024 among Discovery Bank clients and the broader South African population. To enhancing the findings of the SpendTrend25 report, this year Visa and Discovery Bank commissioned an independent public survey among a set of South Africans to capture more detailed perspectives on the use of cash and digital payments, use of subscription services, banking security perceptions and the influence of AI on financial behaviour. Over time, SpendTrend insights have become remarkably valuable in identifying how best to offer more relevant, personalised banking that puts our clients in control and provides real rewards that promote financial wellbeing Hylton Kallner, Discovery Bank CEO 'Our latest comprehensive report identifies shifts in financial behaviour for practical insights into how much people spent, what they spent on and how they spent it. We've also supplemented the quantitative analyses with detailed consumer survey data to gain a deeper understanding of the drivers of the trends that we're observing,' says Hylton Kallner, Discovery Bank CEO. 'For example, while we've seen a material shift to digital payments in our spend data, this is backed up by consumer preferences whereby over 80% of South Africans surveyed are choosing cards or digital payments over cash whenever they can, and the same percentage engage more with their credit card rewards and benefits than they did a year ago as they focus on value-based spending. 'And while digital banking has increased client financial safety, three out of five South Africans are more worried about their banking security than a year ago. 'It's findings like these that provide rich, granular insights into consumers' needs and perceptions that can shape strategies and focus areas when designing products and solutions for clients. 'Over time, SpendTrend insights have become remarkably valuable in identifying how best to offer more relevant, personalised banking that puts our clients in control and provides real rewards that promote financial wellbeing,' says Kallner. 'It's also reinforced our view that digital banking security is going to be a key consumer focus point in future.' Our research, in collaboration with Discovery Bank, shows that people across all income levels are making spending decisions with careful planning and strategic use of financial tools Lineshree Moodley, country head for Visa SA 'South African consumers are undoubtedly feeling the impact of rising living costs, which is driving a significant change in spending habits,' says Lineshree Moodley, country head for Visa SA. 'Our research, in collaboration with Discovery Bank, shows that people across all income levels are making spending decisions with careful planning and strategic use of financial tools. The rapid growth of accessible and affordable online and digital payment methods is particularly noteworthy, and alongside these advancements, there are numerous tools and strategies available to help them navigate these challenges. 'Despite the pressures they face, we hope that the insights from SpendTrend25 will foster meaningful discussions and inspire targeted actions, empowering consumers to not only manage, but thrive in this dynamic economic landscape.' 10 key findings of SpendTrend25 1. Consumer card spend has slowed, despite lower inflation. The prime rate cut in September 2024 offered some relief, but recovery has been slow and led many to rely on value-based spending. In 2024, average spend growth was flat even as inflation fell from 6% to 4.4%. Consumer card spend growth trailed inflation by five percentage points, suggesting that factors beyond prices — like income constraints and rising expenses — affected spending habits. Cities like Bloemfontein, East London and Gqeberha had faster growth in spending, while cities like Johannesburg, Cape Town, Durban and Pretoria experienced more muted growth in spend. 2. Consumers are using their long-term savings for short-term expenses. While credit cards are more pervasive as a result of convenience, rewards and functionality, overall spending on active cards remained steady. South Africans are however looking for alternatives to relieve their financial pressures beyond short-term credit. One way is through the two-pot retirement system. Research among Discovery Corporate and Employee fund members found that they are using their retirement savings for expenses such as home or car costs, paying-off short-term debt, school fees and daily expenses. Among Discovery Bank clients, two-pot withdrawal rates were inversely correlated with Vitality Money status with higher withdrawal rates for high-income earners with a low Vitality Money status than lower-income earners with a higher Vitality Money status, highlighting the importance of smart financial habits and sound financial planning. 3. Groceries, retail, travel, eating out and fuel account for over 70% of total consumer spending. Groceries take the top spot for most, while high-net-worth individuals dedicate a larger share of their spend to retail and travel. Johannesburg residents spend a lower share on groceries and more on shopping and eating out or takeout compared to those in Durban and Cape Town. In comparison, people in Bloemfontein, East London and Gqeberha spend a greater share on food and fuel but less on travel, eating out and takeout. As more people return to the office, fuel spending has surged. After a 4% decline in 2023, average fuel spend per active card grew by 5% in 2024, marking a sharp 9 percentage point increase. 4. Busy lifestyles and the need for convenience increasingly influence consumer spending. Spending on eating out and takeout grew by 12% in 2024, outpacing growth in grocery spend (8%), with demand for convenience shaping consumer habits. Online grocery shopping in SA is still on the rise, with spend up 15%, while in-store grocery spend has grown by just 6%. A positive insight is that the shift towards online grocery shopping has not compromised consumers' health priorities. Discovery Vitality data shows that online grocery baskets contain a 30% share of healthy items and in-store grocery baskets a 27% share of healthy items. When it comes to prepared food, spend on dining out is growing faster at 13% than ordering takeout online at 10%. This indicates that grocery shopping is seen as a convenient task to do online, while eating out is a social experience. 5. Virtual cards are growing in popularity as South African consumers prioritise safety and convenience. Up to 45% of respondents in the consumer survey use virtual cards, driven by increased security, convenience and rewards. VisaNet data supports this trend, showing fraud incidents are six times lower with digital wallet transactions than with physical cards. Johannesburg residents use digital wallets for in-store purchases nearly twice as often as the national average, followed by Cape Town and Pretoria. Most major cities are ahead of the national curve in embracing these mobile payments. 6. South Africans are travelling less internationally but are purchasing more online from international platforms. Travel spend is returning to pre-Covid-19 levels, but at a higher cost per trip. Though overall growth in travel spend slowed in 2024 compared to previous years, the post-pandemic recovery continues. Discovery Bank clients travel far more with up to 24% more spend on travel. They saved over R700m on discounted flights, car hire and accommodation through Vitality Travel, both locally and internationally, with top international destinations being the UK, Mauritius, Australia, the US, and the UAE. While growth in travel spend slowed, spend on international platforms increased significantly, outstripping in-store spend at international destinations. 7. Omni-channel shopping experiences continue to grow both globally and locally. Internationally, consumers are embracing phygital (a blend of physical and digital) shopping experiences, such as ordering products online and picking them up in-store. This trend is also emerging in SA, with 21% of local consumers favouring phygital shopping experiences like browsing online and buying in-store. 8. The use of cash is declining and being replaced by real-time, digital payments. The consumer survey showed that 67% of South Africans use cash only a few times a month or never at all, with over 84% choosing cards or digital payments whenever they can. Online shopping continues to grow across South African cities, with transactions increasing by an average of 5% from 2019 to 2024. Bloemfontein and East London led with 10% and 11% growth, respectively. As digital payments continue to increase, affordability influences payment choices, with expectations for real-time, faster, cheaper payment systems that do not compromise convenience. The SpendTrend25 consumer survey showed that 86% of consumers believe payments should be as cost-effective as possible, while 84% believe it is essential that payments reach recipients quickly. 9. Online entertainment continues to surge. Spending on online entertainment is the fastest-growing category in SA, growing by 110% since 2023. Spending on online entertainment includes streaming services, sports betting, and event bookings. Discovery Bank clients spent more frequently and at higher values on event bookings than the broader market, with 20% growth in the average transaction value. This can be directly linked to their exclusive early access to concert and event tickets. Sports booking transactions, including padel, have also grown across the country. Among Discovery Bank clients the number of sports booking transactions grew by 64%, and by 41% in the rest of the market. Discovery Bank clients played over 93,000 padel games in 2024, 70% of them during the week. 10. Access to a wide range of subscription services is growing among South African consumers. While subscription services were once dominated by streaming, by 2024, they had expanded to include artificial intelligence, sports bookings, groceries and eCommerce. AI subscriptions saw the highest growth in share of spend — growing over three times from last year. Discovery Bank clients are leading this trend, using AI services more than the average South African, with an AI subscription adoption rate of 160% of the market. This rise in interest highlights how quickly AI is becoming part of everyday life.
Zawya
17-04-2025
- Business
- Zawya
South Africa: Discovery CEO Hylton Kallner on the future of spending
There is a declining brand loyalty and a shift towards value as consumers seek brands that deliver quality at competitive prices rather than paying premium prices for established names. CEO Discovery Bank and Discovery South Africa, Hylton Kallner talks about the SpendTrend 2025 report findings (Image supplied) This is one of the predictions for the SpendTrends for 2025. The report also found that AI will begin to inform purchasing decisions. Already AI subscriptions have increased as consumers directly access these tools. Taking a deeper dive into these and other trends at the recent report launch at Discovery Place in Sandton, CEO Discovery Bank and Discovery South Africa, Hylton Kallner emphasises three key insights driving these trends: - How much people spend? - What people spend? - How people spend? Drivers Kallner highlighted the drivers of spending behaviour in 2024: - Sustained high interest rates - Shift to digital real-time payment - Changing safety and security risks - Increased return to office mandates - Broader consumption choices of digital services - Sustained high interest rates High interest rates are straining finances, and in the last year, many consumers accessed their retirement savings to make ends meet. Seventy percent (70%) of spend is on groceries, retail, travel, eating out and fuel, but this varies in the different South African cities. 'While groceries is the highest across all cities, in Johannesburg retail and eating out is also high, while in Cape Town travel is high,' says Kallner. A demand for convenience Busy lifestyles have led to a demand for convenience, showing growth in the spend on eating out and takeout, with spend on food overall exceeding inflation. Groceries are seeing smaller baskets but more frequent shopping. Cape Town spend is the most on groceries out of the South African cities surveyed, while for Johannesburg, eating out is the biggest spend. However, the differentiator between eating out and grocery spend is very small. The shift to convenience is across all age groups with an increase in online food spend with R1 out of every R5 spent is on convenience is spent online. 'Interesting this shift is not at the expense of healthy shopping. However, while healthy food comprise 40% of a basket at the start of the week, this falls to 29% by the weekend,' expands Kallner. Online shop still healthier than physical store shopping. Travel taper off Travel growth has tapered off with an average spend stabilising around post-pandemic levels. The most expensive route is George to Johannesburg. The flights most booked are on Monday and Sunday, which reflects the semigration. Later in the evenings (7 pm) are the cheapest Johannesburg to Cape Town flights, with Friday afternoon most expensive to Cape Town from Johannesburg. Johannesburg to Paris is the most expensive route internationally. International visitors to South Africa love Cape Town with half of visitors flying into Cape Town. The top five countries' visitors are the US, UK, UAE, Germany and Canada. - Shift to digital real-time payment The reliance on and usage of cash have declined and have been replaced by real-time digital payments. 'While cash has not disappeared, the rate of the use of digital payments has been rapid. 'Since PaySnap launched in 2023, it has seen 136 million transactions at a value of R100bn,' says Kallner. - Changing safety and security risks Convenience and security are driving the digital wallet and virtual card adoption, with 60% of Discovery Bank clients saying they are more worried about banking security than a year ago. - Increased return to office mandates Fuel spend has increased as motorists heeded the back-to-the-office call. Sixty percent (60%) of Discovery Bank clients are back in the office five days a week. 'Discovery Bank clients are spending 35 hours a month in their car doing an average of 1,100 km in a month,' adds Kallner. - Broader consumption choices of digital services Omni-channel shopping is still growing, with spend on international platforms increasing significantly. This trend is set to continue. Ninety-five 95) percent of South Africans buy off local platforms, and 77% buy from overseas platforms. South African consumers are also adopting a variety of new streaming services, including AI. 'Last year saw the rapid emergence of AI subscriptions and an accelerated rate of adoption as these services are directly accessed by consumers,' says Kallner.
