E-commerce vital for tourism
A Johannesburg-based Visa representative who spoke at the Namibia Tourism Expo this week said tourism establishments will lose out if they don’t embrace online payments.
31 May 2018 | Economics
“You can make sure that your customers, before they come here, can securely access your service and they can make payments through e-commerce.” - Lenny Kunga, Visa senior director: merchant sales and solutions for Sub-Saharan Africa
Lenny Kunga, Visa’s senior director: merchant sales and solutions for Sub-Saharan Africa, says providing a platform for electronic payments is crucial for the local tourism sector.
Speaking at a tourism networking conference held in Windhoek this week, Kunga said airlines and hotels are the biggest users of e-commerce.
“As we go down to lodges, that is another area, but I think there is still a lot of opportunity, because when I look at Namibia, in terms of e-commerce, airlines and hotels are the biggest ones,” he said.
People also want to pay online for car hire and visa applications, he said.
“When a tourism establishment wants to be paid, it wants to be paid in the best way possible, and the payer also wants to pay in the best way possible, and this where Visa and FNB come on board to support the industry.
“So the world we are living in now is quite digital. E-commerce is big in terms of payments globally, whether it is the tourism sector or any other sector. It makes using cards online simple,” he said.
He gave the example of someone on another continent who wants to visit Namibia.
“So I decided to go there but to me as the visitor, I want convenience. That’s what people want these days. They want convenience. I want to do everything from the comfort of my home.
“People now avoid crowds. I don’t want to stand in a queue if I can buy a dress online. Let me pay online. That’s the convenience that people want these days,” he said.
He said after surfing the internet to compare and choose accommodation establishments, visitors expect to book and pay online too.
If tourism establishments do not simplify this process of comparison, decision, booking and paying on the same platform, they will lose customers to others that do.
This is where the global payments technology company Visa, and the banks that it works with, come in, he said.
“We have afforded this platform to the Namibian tourism sector where now you can ... access e-commerce. You can make sure that your customers, before they come here, can securely access your service and they can make payments through e-commerce.”
According to him, many people are still nervous about paying online, and in many Sub-Saharan African countries cash is still king.
In South Africa, for example, cash is used for 60% of total transactions and the other 40% are card transactions done face to face.
“One of the biggest barriers why people fear transactions online is fear of fraud. Or perceptions that ... I may not receive the goods that I am paying for,” he said.
He said Visa provides that secure network, working with banks such as FNB to ensure that transactions are secure.
Transaction security is key, he said.
“Through FNB and Visa, you are guaranteed that this transaction will be as good as transactions face to face with somebody.”
Globally, e-commerce is growing, he said. Even though domestic transactions in South Africa are 60% cash, for people visiting from abroad more than 80% is e-commerce.
The forecast is that by the end of 2018, the value of global e-commerce will be US$500 billion.
Kunga said Namibia is benefiting from this development. Until about three years ago, when the country didn’t have a bank offering e-commerce, less foreign exchange was coming into Namibia, according to him.
“Those transactions were being captured by acquirers that were either in Germany, and what it means to you as an industry is that you are losing that forex. You want to make sure you capture that here,” he said.