In a virtual meeting, the Committee was briefed by the Departments of Economic Development and Tourism of the City of Cape Town (CoCT) and the Western Cape provincial government on their recovery plans for tourism in Cape Town and the Western Cape area. It was also briefed by Mobile Payment Solutions (MPS), which included Snapscan, YOCO and Zapper, on how they were making it easier for small businesses to conduct their businesses.
The CoCT said its recovery plan included ways that would equip businesses for new ways of working and utilising the city's sectoral support approach to identify new opportunities. For the tourism bounce-back plan, it planned to use methods such as containment, communication and involving the community.
The provincial department indicated that it would be using the containment, adaptation and recovery (CAR) model in its recovery plan. This included providing business support, knowledge sharing and responding to consumer behaviour. It planned to protect and rejuvenate supply and demand, and enable capabilities in the tourism sector. It aimed to achieve 70% of the domestic arrivals and 20% of the international arrivals that had been recorded in the 2019 season.
The Committee commended the CoCT for its presentation and videos. Indicating that it was a wonderful way to promote tourism in the city, Members raised concerns about criminality in Cape Town and asked what the perception of foreigners was, considering the high murder rate, and asked what the department would do to address it. Other issues dealt with the effect of the Covid pandemic on tourist
numbers, how the tourism industry was coping with load-shedding, and the role of the townships in creating tourism opportunities. Members asked the CoCT to revisit its legislation preventing bed-and-breakfast establishments from hosting tourists for more than 30 days, as this inhibited applications for visas from international visitors who wanted to work in the city remotely.
After three MPS entities had explained how they operated and how they were assisting the small, medium and micro enterprise (SMME) sector to facilitate their financial transactions, Members sought reassurance that there were adequate measures in place to avoid the occurrence of fraud.
The Committee commended the Western Cape provincial department for its work with the Tourism Product Development Fund and expressed dismay that it was not being continued owing to budget factors. Members questioned the effect of the value of the rand on attempts to stimulate tourism and were told that a stable rand was important if the sector was to grow. Wesgro was asked to include Western Cape municipalities in the recovery plan that would be marketed in the international market. Members asked what the reason was for municipalities and districts for cancelling its LTOs and RTOs.
Members posed questions to all the MPS that were present. The Committee raised concerns about fraud and asked what it did in cases of fraud. Members asked all the MPS what was the cost of its services and what it entails. Members asked the MPS to provide a brief background about its establishment.
The Committee adopted a wide range of resolutions based on the presentations and the subsequent discussions.
The Chairperson said the meeting arose from previous Committee resolutions on how small businesses and the tourism industry could be integrated.
Input by the City of Cape Town
Mr Geordin Hill-Lewis, Mayor of Cape Town, said the tourism industry suffered a heavy blow when South Africa was red-listed. The City of Cape Town (CoCT) received a number of cancelations from potential visitors. The CoCT held talks with Access Air (AA). It was highlighted that the CoCT was booked at 60%-80% for December 2021, and looked to be the best season in three years. To react to the damage the red-listing had caused, the city had run a domestic tourism campaign during the December holidays. He commended the team at the CoCT for getting the campaign up and running in six days. The campaign worked by bringing in domestic tourists to the city. It was hopeful that the tourists who cancelled in December had postponed their stays and would still visit the city.
The CoCT had made investments in clean-up campaigns and safety because it was aware that tourists would return to the city. It needed to remain focused on its goal of making South Africa one of the long-haul destinations, despite the current pandemic. There was a lot of room for improvement in the tourism industry, and Cape Town could double its number of visitors. It was important to try to improve the tourism industry because it accounted for the largest amount of foreign currency and investment into the city. The CoCT was committed to improving the tourism industry and did not want to achieve only the targets set before the pandemic.
CoCT's recovery plans
Mr James Vos, Mayoral Member for Economic Growth and Tourism (MMEGT), CoCT, took the Committee through its recovery plan.
Cape Town planned to enhance its business retention efforts, making it easier for expansion and investment to resume. It would equip businesses for new ways of working and utilising the City's sectoral support approach to identify new opportunities. For the tourism bounce-back plan, the CoCT planned to use the following methods: containment, communication, and involving the community in the tourism industry.
Please see attached document for details
The Chairperson said that she had thoroughly enjoyed the video in the presentation, and commended the CoCT for its presentation. She requested that it be forwarded to the Committee for Members to promote the beautiful tourist attractions in the city.
Mr A Van der Westhuizen (DA) commended the CoCT for its hard work on the presentation. He also commended the Department for its efforts in supporting the individuals in the tourism industry that had been affected by the pandemic. The Mayor had indicated that compared to other long-haul destinations, Cape Town could double the number of tourists, and had not yet achieved its maximum potential. He was surprised that South Africa had received more than ten million visitors than other destinations that were advertised extensively. He asked what statistics the Department had used if they indicated that tourist numbers could double. Foreigners did not want to encounter safety concerns and experience acts of criminality when visiting another country. He asked what foreigners' perceptions of Cape Town were, with its high murder rate, and what the Department could do to address it. The best advertisement was word of mouth when tourists return home and boast about their experience of another country. How did the Department empower tourists to boast about their experiences? He alluded to examples like brochures and websites.
Ms N Nkondlo (ANC) said studies had shown that the cost of living in Cape Town was very high. She asked the Department what impact the pandemic had had on the price of travelling for tourists. The Department had to ensure that prices were affordable because the pandemic had affected foreign currency rates.
She asked the Department to provide more information on schools and small, medium and micro enterprises (SMMEs) that were involved in programmes involving tourism. She requested a list of the schools involved and an indication of how they were chosen. She raised concern that the SMMEs and informal businesses had been affected by the pandemic. Tourists had not been able to buy souvenirs in Cape Town's central business district (CBD). What was the role of the SMMEs in the recovery plan? The Department had referred to the concept of township tourism, but the difficulty with the townships was that they did not have the required infrastructure to enable tourism. She asked the CoCT what the role of townships were in the recovery plan. Her constituency was the Strand area, and she wanted to take information to her constituency. She requested the Department to provide the Committee with more information on the role of the Strand and Gordons Bay area in the recovery plan.
Ms M Maseko (DA) said that the international media portrayed SA as a country with high rates of crime. This notion deterred tourists from coming to the country. She asked how the Department would create a demand for tourists to visit Cape Town. The Mayor had envisaged that the city could double its tourist numbers, and asked if this would be part of the domestic marketing tool or the international marketing tool. She asked what partnerships the CoCT had with surrounding municipalities because there should be a link when tourists were travelling to neighbouring municipalities.
The Chairperson asked how many workshops the CoCT had held, and how many people had attended its different programmes. She was a bed and breakfast (B&B) host, and Cape Town wanted to promote remote working. Legislation states that B&Bs may not host more than five individuals for more than 30 days. She asked if the CoCT would revisit the legislation to promote tourism and remote-working visas, because tourists were offered discounted prices the longer the stay.
She asked how many people had participated in the Ekasi Heroes and Roll Up Your Sleeves programmes. How many cruise ships had entered Cape Town on cruise ships' programmes? What was the average number of cruise ships that came to the city, because the regulations had been changed for the December 2021 season? What funds would be allocated to cruise ships and Air Access (AA) programmes?
What would the Department and AA do to encourage women to travel alone? The Committee had done oversight work at the airport in George, and management had indicated that there had been a change to its infrastructure. The airport had started running safety programmes, because it had been found there was a decrease in the number of women who travelled alone.
She also asked what the impact of load-shedding had been on the tourism industry.
Mayor Hill-Lewis indicated that the question around remote-working visas was important, and said the Department had submitted a high-quality submission to national government requesting an amendment to the legislation.
Replying to the question about load-shedding, he said it affected the reputation of SA in the tourist community. It also impacted the safety of tourists who travel to Cape Town, as it affected tourist establishments such as restaurants and hotels negatively. The city had established its procurement documents for 300 megawatts of independent power. The CoCT planned to build a reputation among the tourist community as a city in SA that was not experiencing a power crisis.
He replied to the question about increasing the number of tourists to SA, saying that there was room for improvement. Compared to other long-haul destinations like Thailand, which received over 39 million visitors, the CoCT could achieve larger numbers and was committed to bringing more tourists to the city.
MMC Vos said that the city would share the content of its programmes with the Committee because it was easy to distribute on social media. The contents were designed specifically to highlight the products and experiences of the COCT. The vision for 2022 was to create more businesses in the tourism industry. The city would continue to support businesses because it would create jobs for local people. The mission of the Department was to work closely with the businesses in the tourism industry to ensure cost-effective travelling. It was also important because once potential visitors made a booking, the local economy would grow. The tourism industry was so competitive that a business could not work alone, and must form part of a bigger network in the tourism industry.
He said the Department would not look to create routes but would connect the experiences around Cape Town because it wanted to transform the tourism industry.
He replied to Ms Nkondlo’s question, saying that the Department ran programmes that supported small businesses through its supply development and smart procurement workshops. The workshops were conducted online, and the Department would forward the schedule of the workshops to the Committee. It had launched the programmes which would be conducted monthly in communities of small businesses. It had handed out 30 000 tool kits to small businesses and issued rates rebates and classifications to tourist businesses to offer relief because of the pandemic. The Department continued to assist small businesses with product development and access to the market. The programmes looked to link all sectors in the economy, like tourism, call centres, food and beverages, and clothing manufacturing.
He replied to the Chairperson’s question on cruise ships and said the plan for 2020 had been 102 visits, and 104 visits were confirmed for the 2022/23 season. The cruise ships visits were very beneficial to the economy of the CoCT because of the expenditure, maintenance and provision of goods and services for the cruise ships. The Department wanted more cruise ships to start their journeys from Cape Town, and those that visit to stay longer. It worked closely with other stakeholders in the maritime economy to ensure that more cruise ships came to the city. Regarding growth in tourist numbers, there was a very big demand in the forward-bookings. The CoCT had to use the correct marketing tool because there was potential for growth in the tourism industry.
MMC Vos referred to the safety of tourists and said it was important how it responded when incidents occurred because they would happen. The city had created a travel-wise app, whereby care and comfort were provided to victims. The CoCT would provide the victim with accommodation for a few days and the necessary support to organise lost travel documents. The travel-wise app formed part of the "Band-Aid" programme, where the city would be involved in the engagement with the victim and the police.
The B&B issue was a discussion that had to involve the CoCT Department of Planning. When the stay at a B&B was longer than allowed, the timing application scheme would be triggered because of the zoning scheme that the city had to adhere to. The zoning scheme would prevent a home from just turning into a business without following regulations. Issues of health and safety and the neighbourhood must be considered when starting a B&B.
He replied to the question on workshops and said that in partnership with the Cape Peninsula University of Technology (CPUT) and Tourism Development, it had created a manual to support businesses. The manual consisted of a number of modules translated into three languages, which would be taken into communities in the form of a roadshow. The manual alludes to pricing, marketing tools and traditions, especially taking into consideration Muslim visitors, for restaurants to adhere to specific customs. The Committee could join the workshops because they would also focus on the development and marketing of businesses.
Mr Enver Duminy, Chief Executive Officer (CEO), Cape Town Tourism, replied to Mr Van der Westhuizen on the perception that safety was one of the biggest challenges for the COCT. The pandemic had distracted the Department from addressing this challenge. It had taken a proactive approach by implementing the travel-wise app, which includes general safety tips. Video content had been created to make it more accessible for tourists. Cape Town tried to alert visitors rather than alarm them. The Department worked well with the CoCT and the provincial safety unit because it assisted tourists at the ground level. Criminal hotspots were identified through monthly engagements with law enforcement and civil society that formed part of the safety programme. Embassies had also asked for safety information to relay to their citizens.
The reactive approach -- to implement safety measures -- was the Band-Aid programme. This programme also included repatriation of bodies process in the event a tourist died. Studies had shown that in cases of negative media, one needed to counteract it with nine positive media publications. The Department did not have the resources to counteract every negative media publication. It had also conducted media and travel hosting, where domestic and international media had been invited to experience the city. The DEDT could publish a lot of media information indicating that Cape Town was safe, but tourists would trust a known media outlet.
Social media had become a free marketing tool for the Department because when tourists posted their experiences, people in their country would see it. Social media could also have a negative impact on marketing when a tourist experienced an incident. In cases where the Department was made aware of such an incident, the Band-Aid programme would be activated. The Department had officials on a website that engaged with tourists 24/7. The old programme had a walk-in centre open from 9am to 5pm, but this did not take into account potential visitors in another time zone that had questions about Cape Town.
He said travelling costs had impacted the tourism industry negatively because of the pandemic. The biggest cost in the tourism industry was the production of services, which included employees. The tourism industry paid fairly for labour, and when costs were determined by the market, avoiding price gouging was considered. The Department had what was called a code of responsible pricing, which was a manifesto signed by every association in the COCT. The manifesto was reviewed regularly and if any stakeholder was aware of price gouging, the Department had to be alerted. The reason was that the business involved might belong to one of the associations, and the Department would then engage with it to address the issue. It would also investigate the expenditure of the business. This was an ongoing programme, and the Department was marketing 50 things to do for under R50. There were a number of things a tourist could experience that were free in Cape Town, where the tourist needed to pay only for accommodation.
Mr Duminy replied to the question on townships and the integrated economy and said the Department covered a lot of townships like Langa, Mitchells Plain and Phillipi. The DEDT worked closely with the Western Cape Education Department (WCED) to assist in identifying schools that taught tourism as a subject. The programme specifically targets grade 11 and 12 learners who would go to university or pursue a job in the tourism industry. Captains of the tourism industry provide information to learners about the industry, because there was more to tourism than just being a tourist guide -- a learner could become a chief financial officer (CFO) or a CEO. If a learner did accounting, the learner could still get into the tourism industry. The programme also allowed the learner to engage with chief technology officers (CTOs), who offer up solutions to problems in the tourism industry.
To address the challenge of load-shedding, many businesses had adapted and used generators. Businesses have created "dinner in the dark." which turned one's experience into a romantic one. Load-shedding impacted businesses negatively, depending on the frequency and length of power outages. The city did have contingency plans for load-shedding.
MMC Vos said that the CoCT had partnerships with surrounding municipalities. The tourists need not know that boundaries existed because they must feel free to visit any neighbouring municipality. Cape Town was the entry point, with its harbour and the airport, and for this reason, it was important that it had partnerships with other municipalities. The informal businesses were important because they provide tourists and locals with a lot of goods. The Department aimed to provide the informal businesses with dignified and accessible marketing and trading spaces. He could not provide the Committee with more information, because of the Department’s restructuring.
The Chairperson indicated that because of time constraints, any follow-up questions would be forwarded by the Committee to the DEDT. She requested the Department to invite the Committee to any workshops it would conduct.
Tourism recovery plan
Mr Rashid Toefy, Deputy Director-General: Economic Development and Tourism, DEDAT, took the Committee through the Department's tourism recovery plan.
The DEDAT indicated that it would be using the containment, adaptation and recovery (CAR) model while including the provision of business support, knowledge sharing and responding to consumer behaviour. It planned to protect and rejuvenate supply and demand, and to enable capabilities in the tourism sector. It planned to achieve 70% of the domestic arrivals and 20% of the international arrivals that had been recorded in the 2019 season.
Please see attached document for details
Mr Van der Westhuizen commended the work of the Department. He referred to tourism offerings and asked what trends the Department had picked up which would be beneficial to the Western Cape (WC). It had been determined that the South African rand was under-valued, so to what extent were currency exchange rates beneficial to the tourism sector in the WC?
Ms Nkondlo commended the work done by the Department with the Tourism Product Development Fund (TPDF). The Department had indicated that the TPDF would come to an end. She asked what the Department planned to do to reinvest in the fund because it had provided exceptional outcomes in the recovery plan. In the presentation, the Department had made a comparison between domestic and international travel, and she asked how it measured local travel in the 70% target (against 2019 figures) it planned to achieve. It had indicated in the presentation that it planned to transform the tourism industry and get more people to participate in the sector. She asked the Department to provide more detail about what it planned to do to achieve this target.
Ms Maseko asked if Wesgro had included municipalities in the recovery plan that marketed itself in the international market. If it had not, what was the reason for not including these municipalities?
The Chairperson said it had not been a good decision to discontinue the TPDF because of the good that it does. She wanted the Department to provide the Committee with clarity about what it planned to do about it. Municipalities and districts had helped Wesgro with marketing in its respective areas. She asked what the reason was for cancelling the local tourism organisations (LTOs) and regional tourism organisations (RTOs).
Mr Toefy said the exchange rates were beneficial to the tourism industry when the rand devalued in relation to the currencies of Europe. However, a currency that fluctuated was not good for promoting exports and investments.
He replied to the question on the TPDF and said that because of the impact of the pandemic, funds had needed to be prioritised and it was found that the budget could not maintain the TPDF.
Ms Ilse van Schalkwyk, Chief Director: Economic Sector Support, DEDAT, referred to the TPDF and said that the Department had invested over R8 million to support more than 15 businesses. The TPDF formed the blueprint of the recovery plan of tourism,because it identified the gaps in the different districts. The Department had lobbied to reinvest into the fund.
The challenge on transformation was to get more black empowered SMMEs to participate in the tourism industry. This would have been done through the TPDF and linked with Small Enterprise Development Agency (SEDA) and the National Development Plan (NDP). The Department would look to improve its approach to be inclusive of all SMMEs because there was still a lot of work to do in this regard. The long-term plan was to develop a programme to support all SMMEs and to track black empowered SMMEs. The Department had been working with private stakeholders to provide access to its training programme and funds, to support and invest in the planned programme.
She replied to the question on LTOs and RTOs, saying that partnerships with municipalities were very important, and there was a need to design a programme. The Department would approach Treasury for funds to invest in this initiative. The LTOs and RTOs were not the same across the WC, but it was clear how the Department organised the sector. Many municipalities had cut their budgets to work only with an LTO and had decided to do the other work internally. The Department aimed to support municipalities in this regard because when the municipalities stopped using RTOs and LTOs, there would be a decline in tourist numbers. The private sector would also not be able to help the municipalities in this regard. It was difficult if the municipality was not organised, and the Department would have to work with a range of businesses rather than one body.
Ms Monika Luel, Chief Marketing Officer (CMO), Wesgro, replied to the question on the measurement of local travel and said it was difficult to measure because the WC had the most local travellers. A number of Cape Town citizens travelled within a two-hour radius, and this could not be measured because establishments did not ask where a traveller came from. The Department tried to measure local travel through Santander Airport Guide points at the airport, because a lot of Cape Town travellers fly to George or Plettenberg Bay. It conducts a survey in the season of travel, where it contacts all the experiences and sightseeing places to determine its booking numbers, and in some cases, local travel could be measured.
Regarding the municipalities’ role in the recovery plan, she said Wesgro was the provincial destination marketing organisation, and ensured that all work done was constantly aligned at the municipal and regional level. The Department had a regular LTO and RTO forum, which the Chairperson had attended recently. The partnership with the CoCT had been strengthened in the last eight months, and there was an alignment in the role of marketing internationally and domestically.
The Chairperson said that because of time constraints, the Members would forward any follow-up questions to the Department. She stressed the Committee's disappointment that the TPDF would not continue. The Committee resolved in the recent cluster visit that the TPDF had to continue because of its achievements. The issue must be discussed in-depth, because Wesgro was a marketing agency, and the Department focused on the development and skills aspect of tourism. A contingency plan must be put in place if the TPDF was discontinued. The TPDF places emphasis on the entire WC, because the CoCT was not the only travel destination.
The Chairperson said that mobile payment solutions (MPS) would brief the Committee because Wesgro had indicated that this made it easier for businesses to cut through red tape. It also made it easier for businesses in the tourism industry to cut costs on banking fees and assisted those in rural areas with card payments when there was no signal in the area, to grow and create jobs.
Ms Marin Cundall, Chief Executive Officer (CEO), Snapscan, took the Committee through the presentation, providing an overview of its establishment and its processes.
Please see attached document for details
Mr Matt Brownhill, Head of Strategy, YOCO, took the Committee through the presentation, providing an overview of its establishment and its processes.
Please see attached document for details
Mr Brett White, CEO of Zapper, took the Committee through the presentation, providing an overview of its establishment and its processes.
Please see attached document for details
The Chairperson commended the work that the MPS did to assist SMMEs. The Committee would engage with banks on 2 March to discuss what it was doing to assist these small businesses.
Mr Van der Westhuizen expressed his happiness that the three mobile payment solutions entities were established in the WC. It indicated that the WC was a technology hub. Some of the MPS entities required a business to have a bank account in place. He asked what the MPS charged for their services and what their contracts with businesses entailed. The cost of the services was important, because of the poorer vendors who still carried the risk of dealing with cash. In the financial world, there were a lot of fraud cases, and customers need to be assured that if fraud occurred they would not incur any costs. He asked the MPS entities what plans they had in place to prevent cases of fraud. Banks had come up with innovative ways for businesses to make payments and offered cheaper bank rates. He asked the MPS what it added to the normal credit card plan.
Ms Nkondlo commended the presentations of the MPS for the youth and diversity it displayed. She asked Zapper and Snapscan to indicate who had created them. Snapscan had indicated that there were ways to track local travellers. She stressed that the tourism industry should look not only at international travellers, but also local travellers. Government officials must engage with MPS to monitor local tourism. The presentations indicated that the MPS were servicing the informal business sector because the government had not been able to quantify the sector with data. A number of informal businesses did not have the technology which allowed for card transactions. She asked the MPS to indicate its percentage of clients that were informal business traders operating in the rural and urban areas.
The Chairperson asked the MPS to provide more details on the cost structure for its clients. She asked how the MPS incorporated feedback from its clients. Did it provide the end-user with proof of payment, because when she did a payment through the MPS, it did not e-mail proof of payment document? In some cases, the bank statement would not indicate who the end-user paid. The Department and the CoCT needed to enable the MPS to engage with businesses in the rural areas to discuss what services were available to them. This was very important because many customers wanted to make card payments, but a lot of vendors did not offer this option. The Department must engage with the MPS on its monitoring tools and data gathering methods.
Ms Cundall replied to the question on costs and said that Snapscan had a single cost structure, with no joining fee. It serviced a number of micro-businesses. There were no additional costs and no locked contract. The only costs incurred by businesses were the payment transaction of 2.95%. It also implemented a sliding transaction scale, whereby the more transactions the business did, the lower the costs. The payment transaction cost was calculated monthly. Snapscan did charge for its stands that the businesses used.
Regarding fraud, Snapscan had the information of the merchant and the cardholder, and this enabled it to have strong fraud management systems so that it could run identification and risk management services for the merchant and customer. It did bank-level account verification because it was a Standard Bank product. Merchant side fraud was non-existent. It focused on active customer support if fraud had been identified by the customer, to protect the customer from financial loss.
Snapscan's contribution to innovative banking involved working closely with Standard Bank to provide businesses with affordable banking costs. The engagements talked about how it and Standard Bank could leverage small business accounts and link them so that the business did not go through the bank processes.
She said Snapscan was created in Stellenbosch by Fire-ID payments and was currently owned by Standard Bank. It did not interfere with the daily running of Snapscan, which allowed it to engage in innovative ways with its customers. She said any company like Snapscan would incorporate client feedback, as it gave an indication of the daily business.
She replied to the question on proof of payment, saying that there was an option to receive proof on the Snapscan app. It was busy implementing a system where an email reflecting payment would be mandatory because of the client feedback it would incorporate.
Mr Brownhill said YOCO's cost model was a monthly fee, which included a pay-as-you-use model, and the fee for each transaction was 2.95%. The client’s identity document (ID) was required to sign up. YOCO did not require the client to have a business account. The card machine was a one-off payment, and there were no locked contracts. Digital payments were cheaper because there was a risk attached to handling cash, and it was expensive to deposit cash. Digital left a trail for micro-businesses to prove their accumulation of revenue. To make MPS accessible to all businesses, YOCO had a low-cost structure. Data showed that before joining YOCO, 80%-85% of businesses did not accept digital payments.
Mr James Kramer, Head of Risk and Data, YOCO, said fraud had been one of the challenges when YOCO was established. There was a perception that dealing with small businesses carried a lot of risk and this was one of the barriers that affected them. To reduce fraud, businesses needed to go through a difficult process and meet requirements like credit checks, trading history and trading addresses of the businesses. It was found that micro businesses did not meet these requirements, and were excluded from processing card payments. To further reduce fraud, YOCO had implemented a technological tool that monitored transactions in real-time, and if suspicious activity was flagged, it could block transactions. There was a verification process that the merchant must use to access the card machine, so in cases of fraud, the merchant would not be held liable. YOCO did have a low rate of fraud cases.
Mr Brownhill said the data it had on informal businesses was not 100% accurate. It was difficult to determine the informal and formal businesses because the data did not provide YOCO with this information. YOCO's determination of informal businesses was based on geographics. Data indicated that 10%-15% of its clients were informal businesses, and there was substantial growth. When customers asked to pay with a card, this forced businesses to provide customers with this option. There was a brilliant case study of a car guard who provided customers with the option to pay with a card, and he had managed to save up and purchase a car.
Ms Lerato Teffo, Customer Insight Specialist, YOCO, replied to the question on client feedback and said the entity had a customer care team dedicated to understanding the needs of clients and what issues the merchants were facing. This information was communicated to the company to ensure a good working relationship with clients.
Mr Brownhill said that data was important to the company, and it monitored thousands of transactions. The data indicated the health of small businesses and allowed YOCO to create products that were important to them.
Mr White said Zapper had no locked contract and charged 2.9% per transaction. It used a cost structure whereby the more the business did transactions, the lower the monthly fee. It was found that businesses wanted a fixed fee, so it did offer a business plan fee which costs R199 and 2.2% for each transaction. Merchants also had the buy-now-pay-later (BNPL) payment method, which incurred additional costs and was done on a case-by-case basis. The monthly fee included merchants who use banking apps. Zapper charged extra for additional material like stands.
He said the entity uses a Know-Your-Client (KYC) system to prevent fraud. It had the data of the merchant and the customer. This allowed it to limit the behaviour, depending on the level of trust in the merchant and customer. Zapper used the data to monitor and evaluate its risk management. The charge-back rate was 0.01%, which was very low.
He said Zapper enabled banks to join its merchant network. The merchant network was not restricted to Zapper's first party merchants that it signed up directly but included third party merchants signed up by its partners. Its headquarters were in Century City, Cape Town. It viewed itself as a contactless payment, insights and rewards business. The insights and rewards were a big component of its business. It had data about customer behaviour and each transaction, including third party merchants. There was a unique identifier that would provide data on the location of the merchant and it could trace if the merchant had moved. Zapper did not provide the data to anybody because of the consumer's protection rights.
He replied to a question on client feedback and said it had a team called Customer Success Advocates (CSA). The CSA was actively engaging with merchants to find out what problems the merchants were experiencing and if the MPS was working. A team was currently surveying merchants all over the country for feedback. Zapper was working on innovative ways to address the issues of merchants.
On the issue of proof of payment, it e-mails consumers automatically once a transaction has occurred. It planned to allow its customers to view transactions on its app. Another way it tracks customers was through group campaigns. such as at shopping malls. The mall could encourage its tenants to get on board and create ecosystem campaigns that would give them insights into consumer behaviour. The insights would provide the mall data on how many customers enter its shops and how frequently they do so. The mall would be able to create a marketing strategy for its customers. Zapper had recently launched extensive campaigns with different shops.
The Chairperson said that the Committee interacted with different government departments across all levels. It had been important to engage with the MPS to gain insight into its experiences and their clients’ experiences.
Mr Van der Westhuizen said that he had not known about the support offered to tourists when incidents occurred. The Committee should commend the CoCT and the DEDAT for the work done and should ask to what extent they could extend the helpline to tourists. They needed to include all incidents that tourists may encounter. It was important to have a proactive response to these incidents because the SA wanted tourists to go back home indicating how helpful the country's government was.
The Chairperson agreed with the resolution of Mr Van der Westhuizen.
Ms Nkondlo said her question on the Gordons Bay and Strand area had not been answered, and it was a very important question. DEDAT needed to provide the Committee with a list of schools that participate in its programmes. The CoCT had to provide more details about the rates rebates for SMMEs because then the Committee could convey the information to SMMEs in the tourism industry. It also needed to provide information on its monthly workshops on the development of SMMEs in the tourism industry. The workshops were held online and would be easy to share with SMMEs because they need the tools to develop their businesses. The CoCT had indicated that it had a responsible pricing plan for businesses that prevented price gouging. It was important that it provided this to the Committee. The Department would need to use the same tool as the MPS to track customers in the tourism industry. as they had come up with innovative ways to collect data of the entire tourism industry.
She requested Committee to review the TPDF issue because it provided the funding for empowering black SMMEs in the tourism industry. The Committee needed to determine how it would address the issue of municipalities’ LTOs being reduced. It had to write a letter to the Minister of the DEDAT because it became a challenge if municipalities’ budgets were being reduced.
The Chairperson agreed with the resolutions of Ms Nkondlo. She said that the CoCT and the DEDAT needed to forward their videos, because it was a wonderful way to promote tourism. The Committee would attend the workshops that the Department conducts. The workshops would provide the Committee with information about what the different stakeholders were doing in different sectors of the tourism industry.
She said it would be beneficial to enable engagements between Wesgro, the Department and MPS to work in collaboration in assisting SMMEs. The MSP had indicated that the majority of its clients were in the tourism industry. The Department must use similar monitoring tools to those of the MSP to obtain specific data about urban and rural economies. The municipalities employ LTOs but worked with Wesgro, so the Committee needed to engage with Wesgro because it would be able to indicate what the LTO's role in the recovery plan was.
Ms Maseko said that the CoCT could do more work in the townships, and beautiful attractions in municipalities were being vandalised. Wesgro needed to do more work in the rural areas and create jobs for people who lived there. This would ensure that people did not need to go to work in the cities. The issue of budget cuts had to be addressed because Wesgro would create a budget for areas that had something to offer in tourism, but would not take into account the needs in many rural areas. The Committee needed to conduct oversight visits in townships with potential, and enable the Department to formalise small businesses in them. This would also create revenue and jobs in municipalities. The Committee should be proactive in its oversight work and not wait for feedback from the Department.
The Chairperson said the Committee would not be able to identify the specific areas to conduct its oversight work. As a constituency head, she had to distribute links and adverts to different sectors over social media to inform them about opportunities. The Committee could use the methods of the social cluster, which had meetings with stakeholders on its premises to see what was happening at the institution. She said the Committee did have a list of the SMMEs and the beneficiaries of the TPDF. When the Committee had a briefing online it could identify a small business and have an engagement with it on its premises.
Ms Maseko said that the focus must be on municipalities, and not only on SMMEs.
The Chairperson agreed and said that this could be linked to the engagements with Wesgro and the LTOs in municipalities.
Ms Nkondlo said that the Committee had invited a small sample size of the MPS in the Western Cape. The Committee did have the flexibility to conduct innovative oversight work. She agreed with Ms Maseko’s resolution and made an example of going to a restaurant in Gordons Bay and conducting oversight work there. The Committee could visit potential tourist sites because places in Johannesburg had been turned into a tourist attraction like Vilakazi Street.
The Chairperson agreed with the resolutions and drew on the example of the Committee's oversight work in George and Mossel Bay, where different sectors had been invited. The reason the Committee had invited MSP entities that were based in the WC was because of the resolution it made last year. She suggested that the DEDAT forward more information about its Ekazi workshops. This would provide the Committee with information on how often it conducted them.
Ms Nkondlo requested a list of the 47 events that the DEDAT had held, and what its criteria were for hosting the events. She also asked the Department to provide the list of municipalities that took part in its workshops because it was important for the Committee to note which municipalities formed part of the recovery plan.
Ms Maseko said that when the DEDAT hosted an event, it should always invite the Committee because it would enable them to interact with all the stakeholders in the Department. She requested that the Department invite the Committee to all its events.
The Chairperson agreed with the resolutions. She said that the meeting had been very important, given the large sector of the economy made up of the tourism industry.
The meeting was adjourned.
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