Monday, September 05, 2011

PayD. A new way to pay with a Debit Card.

Some months ago, MTN announced a new payment initiative that has been launched in South Africa in collaboration with Standard Bank and Nedbank (Read here). The technology utilised in this product uses SIM cards and PIN entry to turn mobile phones into secure encrypted point-of-sale terminals.

In a related announcement, Paygate (one of the largest online aggregators in South Africa), announced that they will allow PayD (Read here). This opens up a large merchant community (ranging from major airlines to smaller retailers) for consumers that have registered their debit cards with PayD.

In order for this service to succeed it is now important to make it available to a large community of subscribers, for the subscribers to sign up to the service and to use it in earnest. The transaction volumes will ultimately dictate if this service will be seen as successful or not. It will take dedicated attention and some smart marketing initiatives to drive transactions.

1 comment:

Mark Griffioen said...

No doubt this is a great and idea. Personally I'll be very interested to see how the "absolute fraud" numbers play out. Considering that in South Africa lower LSM groups have traditionally been issued with Debit cards requiring all transactions to be authorised online in real time

As with anything new the learning curve will create opportunity to exploit those debit card holders who share their debit card details and PINs with people they think can be truste. I'see this countless times while observing ATM users or social grant recipients go about the business of extracting they hard earned money.

On the flip side though it is a very attractive proposition for the MNOs who want to claw back the digital airtime distribution channels from the likes of banks and other rather large players.

As I see it Nedbank and Standard Bank have the least to lose by allowing their debit cards to participate. While ABSA and to a greater degree FNB with their superor digital distribution channels might be a little nervous. Selling airtime and other virtual goods is a good business and the MNOs want some of the pie back.