Blue Label and MasterCard's partnership to roll out point-of-sale devices to smaller outlets, such as spaza shops, is a test bed to determine whether the solution will work further afield.
This week, the companies launched the devices in Soweto as part of its first phase to roll out 22 000 units to small traders and rural shops.
"Over and above the estimated 100 000 spazashops spread across SA, there are tens of thousands of small and medium-sized retailers and service providers," says Blue Label joint-CEO Mark Levy.
Philip Panaino, division president of MasterCard SA, explains the launch is a test bed and the intention is to take the offering further. He says it can be taken nationwide and expanded into other emerging markets.
Blue Label has operations in India and Mexico, where it is aggressively rolling out infrastructure. Panaino says the device will be engrained in Blue Label's DNA. He says the solution helps MasterCard and the economy become less cash-centric, and that the safety and security around the offering is "unparalleled".
Panaino says the offering is a "test bed" to a "perfect" model. He notes the company's aim is to further the 'electronification' of payments, estimating that about 70% of South Africans still use cash to make payments.
MasterCard partnered with Blue Label to have a strong footprint and because the listed company understands small merchants, and has a captive audience, says Panaino. This February, it said it was looking at launching a cheaper point-of-sale device to target merchants with lower turnovers.
"While the number of South Africans with access to formal banking products has increased significantly in the last year, the number of card acceptance locations - especially in rural and peri-urban areas - has not grown in tandem."
Mobile solution
Blue Label terminals are not chip-and-PINccompliant, but the companies do not want to replace the terminals, but rather use technology to get around this, says Panaino. He explains that MasterCard Mobile is being used for about 7 000 point of sale units, while around 15 000 will be contactless.
Master Card Mobile allows people to activate their account on their phone and use their mobile number to shop, Panaino explains. He adds that the consumer enters their PIN into their phone and no card details are stored on the device.
The solution allowing people to shop using their phones will also be rolled out to Blue Label's self-service terminals, says Panaino. The MasterCard Mobile payment platform enables MasterCard cardholders to use their PIN-based debit, cheque or credit card issued by Standard Bank, Absa, Nedbank and the South African Social Security Agency and their mobile phone to pay for their purchases in-store at select Blue Label-approved merchants.
"This is the first time MasterCard Mobile is made available to consumers in the physical retail environment. This innovation is a cost-effective payment mechanism that doesn't require customers to open another bank account," explains Panaino.
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