South Africa must say goodbye to bank cards

South African banks are encouraging customers to embrace virtual cards and tap-to-pay functionality in digital wallets over physical plastic cards due to their improved security, among other benefits.

According to the South African Banking Risk Centre’s (Sabric) latest statistics, credit and debit card fraud continues to rise in South Africa.

Sabric’s annual crime statistics report revealed that card fraud increased by 9.1% between 2022 and 2023, with losses growing from R414 million to R452 million.

Most of this was due to card-not-present fraud, which contributed to 80.6% (R338.5 million) of gross fraud losses on South African-issued credit cards. Sabric reported that CNP fraud increased by 18.4% compared to 2022.

Card-not-present (CNP) refers to fraudulent transactions where the physical card was not presented for the transaction. This typically occurs when fraudsters steal card details and use them to perform transactions online.

Lost and stolen fraud made up 11.7% of all card fraud, increasing by 26.9% to R48.9 million compared to 2022.

Another type of card fraud listed by Sabric was counterfeit cards, which criminals used to steal R22 million in 2023.

Most of this fraud — R12.6 million — was committed using counterfeit debit cards, while the rest used counterfeit credit cards.

This was a significant decrease from the previous year, when R42.8 million was stolen using fraudulent bank cards. The improvement was attributed to contactless payments and stronger security measures.

This offers some confirmation that minimising opportunities for criminals to steal your physical card details does reduce fraud.

“Card fraud is difficult for the banking industry because perpetrators prey on the vulnerabilities of bank customers and do not target banking systems,” the the Banking Association of South Africa (Basa) has said.

Basa warned that physical cards are easily lost or stolen, and in many cases, fraudsters can use the card to process fraudulent transactions.

Therefore, banking customers with physical tap-to-pay cards must set a limit for transactions above which a card PIN is required.

Another risk emerges when customers apply for validly issued credit and debit cards, only for them to be intercepted by fraudsters before they reach the designated recipient.

These cards can then be used to process fraudulent transactions on the authentic holder’s account.

Rise of tap-to-pay and virtual cards

According to a Visa and Discovery Bank survey, forming part of the SpendTrend25 report, 45% of cardholders use virtual cards, while some respondents own virtual cards but don’t use them.

Discovery Bank said fraudsters are becoming more sophisticated when it comes to targeting online payments.

“Virtual cards are increasingly being favoured for their enhanced security and control over spend, making them a top choice for digital transactions,” it stated.

FNB agrees that virtual card usage is increasing rapidly in South Africa.

According to Ashley Saffy, head of spend and customer value management for FNB Card, 7.2 million FNB virtual cards have been created since they first launched in July 2020.

She added that the total spend on virtual cards since their inception had reached R111.2 billion as of 28 February 2025.

The SpendTrend25 report, which incorporated five years of spending data, also revealed that digital wallet usage for in-store payments has grown significantly in recent years.

Digital wallets’ share of in-store payments grew by 9% in 2024, matching 2023’s increase.

Citing the PayFast State of Pay 2024 study, Discovery Bank noted that digital wallets like Apple Pay and Samsung Pay now account for 22% of transactions.

It added that this figure is expected to rise as most customers prioritise speed, simplicity, and security.

“This shift is especially strong in Johannesburg and Cape Town, where digital payments are becoming the norm,” said Discovery Bank.

“The Visa Stay Secure Study 2025 reports that 68% of South Africans plan to use digital payments even more in the next year.”

The chart below shows the growth of the average digital wallet spend per active card across major metros in South Africa from 2021 to 2024.