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South Africans spend more on romantic experiences like travel and dining out, with an increased preference for contactless payments.
South Africans spend more on romantic experiences like travel and dining out, with an increased preference for contactless payments.

Mastercard Index: Love and pockets run deep in South Africa as Valentine’s Day spend soars

ECONOMIC NEWS

Issued by Mastercard - Feb 14th, 10:07

According to the latest Mastercard Love Index, South Africans are willing to dig deeper into their pockets to spoil the ones they love on Valentine’s Day, splashing out on experiences like dining out and travel rather than on traditional gifts.  

The index, created by analysing credit, debit and prepaid transactions across the past three Valentine periods (11th-14th February 2016 - 2018), revealed that sentimental spending in South Africa has grown by 66 percent since 2016 – well above the global average of three percent - with the majority (30 percent) of Valentine’s purchases made on 11 February.

Dinner dates at a restaurant remain the most popular way for South Africans to say “I Love You”, accounting for more than 80 percent of the total transactions made in 2018.

Although the stomach may be the quickest way to a loved one’s heart, it isn’t the only one. Jetting off for Valentine’s Day (via plane or train) saw a significant rise as the number of transactions increased by 161 percent in 2018, accounting for 25 percent of total spend over the most romantic time of the year.

Indulging in a hotel stay remains a firm favourite, with hotels comprising 40 percent of the total value spent over the Valentine’s period in 2018.

While plumping for traditional gifts like flowers saw a 24 percent increase in the number of transactions versus 2016, this category accounted for a mere one percent of the total transactions. Spending on jewellery in 2018 declined 43 percent since 2016.

“Spoiling your loved one on Valentine’s Day shows no signs of slowing down in South Africa,” says Mark Elliott, Division President, Mastercard Southern Africa. “Our data also highlights the move towards the ‘experience economy’ where consumers are choosing to create lasting experiences and happy memories rather than purchasing material gifts.”

When it comes to paying for purchases, the use of contactless technology continues to rise in momentum as the value of transactions rose by a huge 556 percent in 2018 compared to the same period in 2017. It’s hardly surprising this is a popular method of settling the bill - especially with contactless payments now widely accepted in the country.

Meanwhile, appetite for online shopping has grown with a healthy 81 percent increase in the number of e-commerce transactions. Yet, as payments become more digitized, the power of the physical touch remains – 97 percent of Valentine’s Day transactions are still made in person.

“With the rise of safe and seamless contactless and digital payments, it’s now easier than ever to impress our loved ones with meaningful Valentine’s surprises,” says Elliott

“Now in its fourth year, our Mastercard Love Index offers retailers and merchants priceless insights into consumer buying habits and behaviours during the period leading up to the most romantic day of the year.”

KEY SPENDING PATTERNS PER REGION DURING VALENTINE’S DAY PERIOD ACROSS 2016 - 2018

United States

• U.S. saw a 98% increase in the number of e-commerce transactions from Valentine’s Day 2016 to Valentine’s Day 2018
• In 2018, people were planning ahead with the majority of Valentine’s purchases happening on the 11th February

Latin America and the Caribbean

• Although LAC saw a 37% decrease in the total spend during the Valentine’s Day period, the number of transactions was up by 15%
• In particular, the number of contactless transactions saw a significant 9720% increase, with the total spend on contactless increasing by 3452% (from $9.5k in 2016 to $399.1k in 2018)
• Share of spend on restaurants decreased by 36%, but the volume of transactions increased by 19%
• Share of spend on flowers and jewellery both saw significant decreases – by 88% and 68% respectively from 2016 to 2018
• However, the number of transactions for hotel stays increased by 45%, with the value of transactions increasing by 12%
• The number of e-commerce transactions increased by 68% from 2016 to 2018, and the value of these transactions increased by 70%

Europe

• Europeans spent 30% more in the Valentines period in 2018 than in 2016, with 41% more in volume of transactions
• Experiences saw key growth, with the spend on hotels, restaurant trips and transportation increasing by 23%, 15% and 61% respectively
• Although jewellery remained largely stable, with a 1% increase in spend and 7% increase in number of transactions, flowers were increasingly popular: 2018 saw 59% increase in spend and 54% increase in number of transactions from 2016 to 2018

Middle East and Africa

• The Middle East and Africa increased sentimental spending by 10% from 2016 to 2018, with a 20% increase in the volume of transactions
• Contactless, in particular, saw huge growth: an increase of 8991% in spend from 2016 to 2018, with 25663% increase in volume of transactions (from 32 in 2016 to 8,244 in 2018)
• Spending on small gifts increased, with a 94% increase in the number of transactions for flowers and 33% increase in spend on cards and stationery
• Similarly, spending on experiences – hotel trips and transportation – rose by 19% and 28% respectively

Asia Pacific

• Asia Pacific increased sentimental spending by 33% in 2018 from 2016 and volume of transactions increased by 37%
• Increases in both spend value and number of transactions were seen in all purchase categories, with the most significant increase made on flower purchases: 89% higher than spend value in 2016 and 73% more transactions
• Transportation was also more popular with a 65% increase in the value of spend, and 25% more transactions

Canada

• Canadians increased sentimental spending in the Valentine’s Day period by 23% from 2016 to 2018, but the number of transactions decreased by 3%
• Contactless spend increased by 230%, from $3.2m in 2016 to $10.5m in 2018
• Spending on small gifts increased, with a 67% increase in the value of transactions for flowers and 27% increase in spend on cards and stationery
• E-commerce transactions increased by 96%, with the value of spend increasing by 99%

 

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