MTN and Standard Bank have unveiled an e-commerce payment system that will enable the bank's account holders to buy airline tickets using their debit cards.
The service, a joint venture between Standard Bank and MTN Mobile Money, can be regarded as a shot in the arm for the millions of debit card users in SA who currently cannot use these cards to book flights. At the moment, users need a credit card to book a flight.
MasterCard VP for advance payment in the MEA region Dougie Henderson explains that currently PIN-based Maestro cards cannot be used for online shopping.
“The are two types of debit cards - cheque debit card and PIN-based Maestro debit card. You can use cheque debit cards to buy online, but can't use PIN-based Maestro cards to buy online,” says Henderson.
This stipulation restricts online services to a few elite groups of consumers and prevents companies from tapping into the mass debit market.
MTN and Standard Bank also announced that low-cost airliner 1time is the first to be roped in as part of this agreement. Account holders of MTN Mobile Money and Standard Bank will be able to immediately use their debit cards to buy 1time flight tickets to any destination.
The service will, however, be expanded to include other airlines as well. Consumers will have to do a once-off registration to be able to use this service. Michael Kaminski, CIO of 1time, say this agreement was part of a plan to stay ahead of competitors, which include other low-cost carriers such as Mango and Kulula.
“In the last seven years, 1time has been the fastest growing airline, and we are targeting 11 million debit card users," notes Kaminski.
Dave Paratt, head of business development at MTN Mobile Money, says the deal will broaden its scope as the service can be made available to other network providers.
"Currently, the service is available to MTN and Vodacom; it is not an exclusive product," he says.
The partnership is the latest such arrangement between retailers, banks and low-cost airlines, as companies step out of their comfort zones to seek innovative cross-partnerships to boost each other's revenues and profits.
A few years ago, retail giant Edcon launched a similar tie-up with Mango - the no-frills airline owned by SA Airways - in terms of which account holders of stores such as Edgars, Jet, Boardmans and Prato could debit flight tickets to their clothing accounts.
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