Though near-field communication (NFC) technology is far from mainstream in SA, local banks have started trialling the technology.
So says Frederic Guillou, director of banking solutions for southern Africa at Gemalto, a digital security company.
NFC technology allows a smartphone to communicate wirelessly with other devices by tapping them together.
Mobile NFC payment is not yet mainstream in Africa as it requires a more complex infrastructure to be in place, which takes time, says Guillou.
Absa - SA's largest bank by customer number - currently provides contactless NFC acquiring services (tap points) to two transport networks in SA, namely ReaVaya (City of Johannesburg) and MyCiti (City of Cape Town).
Standard Bank deployed the Muvo card in the city of Durban; it allows clients to make purchases and pay for public transport, says Guillou.
According to the Strategy Analytics' Wireless Media Strategies: 2013-2017 report, it is expected that a third of mobile phones will have NFC, and the global mobile payment market will rise to 450 million people by 2017.
Banks offering contactless payment functionality bring additional value and convenience to their customers, which help to differentiate them from the competition, says Guillou.
Also, he adds, surveys show the tech-savvy young generation is ready to adopt contactless mobile payment solutions - a clear advantage for banks to build on new generations of customers.
For mobile NFC to grow in SA, end-users have to be equipped with NFC-compliant smartphones.
Guillou points out that as the South African market grows and matures with the proliferation of NFC-compatible smartphones and contactless point of sale terminals, it might not take long before mobile operators and banks start launching NFC mobile wallet solutions and offer their customers the opportunity to pay in shops in a contactless mode using their phone.
"As payment solutions mature in South Africa and consumers become increasingly comfortable with their use, the development of other solutions based on NFC will gather pace and when it comes to mobile NFC use cases, creativity will have no limit, to the benefits of the end-user," concludes Guillou.
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