PayInc said 186.8 million electronic transactions were processed during June, up 11.6% from a year earlier.
Image: Magnific
South Africans continued to embrace digital payments in June despite economic activity weakening for a second consecutive month.
This suggests households are still spending but are becoming increasingly cautious as higher fuel prices, elevated interest rates and global uncertainty weigh on confidence.
The PayInc Economic Index, which tracks the real value of electronic transactions together with wholesale cash demand, declined 0.9% in June after a revised 2.0% contraction in May, reaching its lowest level since November 2025.
Although the index remained 2.5% higher than a year earlier, independent economist Elize Kruger said the first half of 2026 reflected a strong first quarter followed by a notable moderation in economic activity during the second quarter.
The latest reading adds to signs that South Africa’s economy lost momentum through the second quarter, with economists recently warning that growth is likely to remain subdued at around 1.2% this year as global uncertainty and pressure on consumers continue to weigh on activity.
“While the signing of a peace framework between the United States and Iran in June has helped ease some global tensions, uncertainty continues to weigh on business and consumer confidence,” said Kruger.
Kruger said, “as such, many remain cautious, delaying spending and investment decisions. This is reflected in the softer economic activity recorded during the second quarter”.
While oil prices are easing to around $72 a barrel, daily over-recoveries at the pump have narrowed to below R1/litre for both petrol and diesel, while households and businesses continued to face pressure from elevated fuel prices and higher interest rates, said Kruger.
“This suggests that any fuel price reduction in early August may be limited, unless the rand strengthens further or oil prices decline more meaningfully during the month. Together with weaker confidence, these pressures are likely to weigh on economic activity in the months ahead,” Kruger said.
Other leading indicators painted a mixed picture. The S&P Global South Africa Purchasing Managers’ Index edged up to 50.5 in June, signalling modest expansion, while Naamsa reported vehicle sales growth of 15.3% year-on-year.
However, the Absa Purchasing Managers’ Index fell to 47.3, pointing to continued weakness in domestic demand.
Kruger said the second quarter had highlighted how quickly confidence could shift in response to global and domestic developments.
“While electronic payments activity remains resilient, the broader economic picture suggests that growth is likely to remain subdued until inflationary pressures ease and confidence returns meaningfully,” she said.
PayInc said 186.8 million electronic transactions were processed during June, up 11.6% from a year earlier, while the nominal value of electronic transactions increased from R1.369 trillion in May to R1.427 trillion.
Transaction volumes for the first six months of 2026 increased 11.2% compared with the same period last year, reinforcing the continued shift towards electronic payments.
“The continued growth in digital payments demonstrates that consumers and businesses increasingly rely on electronic transactions for their everyday payment needs, even during periods of economic uncertainty,” said Shergeran Naidoo, head of stakeholder engagement at PayInc.
Naidoo added that “while traditional EFT payment streams continue to grow steadily, DebiCheck and PayShap are gaining momentum, reflecting the ongoing evolution of South Africa’s payments landscape.”
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